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GIFT   OF 


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ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
of  the  A.  W.  SHAW  COMPANY 


SECTION   1 

Picking  the  ^^One  BesV^ 
Marketing  Plan 


PICKING  THE  RIGHT  MARKETING  PLAN 

FACTORY — a  ramshackle,  three-room  frame  cot- 
tage  which  housed  kitchen,  laboratories,  botthng, 
storing,  and  assembhng;  stock — a  gross  of  empty 
four-ounce  bottles  with  corks  and  cheap  labels;  assets 
— a  family  formula  for  a  face  lotion;  this  was  the 
condition  not  many  years  ago  of  a  now  prosperous 
concern  manufacturing  toilet  preparations. 

The  marketing  plan  which  made  possible  the  first 
strides  toward  success  was  furnished  by  a  young  man 
whom  the  original  owner — a  man  of  60 — took  into 
partnership.  The  new  partner  furnished  $100  capital 
which,  with  $25  from  each  of  four  friends  of  the  older 
man,    enabled   the   young   concern   to   begin  selling. 

The  first  merchandising  step  was  to  place  on  con- 
signment in  the  local  general  store  six  dozen  bottles. 
The  second  came  when  the  new  partner  went  from  door 
to  door  seUing  the  product — not  as  a  face  lotion,  but 
as  the  ideal  lotion  for  use  on  the  hands  after  a  busy 
Monday's  washing.  The  profits  from  these  two 
''elaborate"  sales  campaigns  enabled  the  firm  to  pur- 
chase a  gross  of  ground-glass-stoppered  bottles  and  to 
enhst  a  real  artist  to  design  a  label.  This  label,  with 
its  delicate  blue  background,  gold  borders,  and  an 
attractive  girl  in  the  center,  plus  unusually  fine  lettering 
brought  the  cash  capital  of  the  pair  down  to  a  $10  bill. 

The  package  looked  like  a  dollar  bill  and  that  was 
the  price  on  the  label,  but  the  first  six  dozen  were  sold 
at  30  cents  net  each.    These  were  placed  on  display 

121 

Copyright,  1921.  by 

A.  W.  SHAW  COMPANY 

as  a  part  of  the  Shaw  Selling  Seriee 


122      .  .MAitKl^TINfJ  .F^M-NS'  AND  POLICIES 

in  a  cut-price  drug  store  in  a  big  city  nearby.  The  new 
partner  himself  decorated  a  window  to  match  his  label, 
and  presided  over  the  foot-square  demonstration  table. 

This  process  was  repeated  six  times  in  two  weeks 
before  the  firm  was  financially  strong  enough  to  order 
five  gross  of  fancy  bottles,  and  also  cash  in  on  the  low 
price  of  quince  seeds.  These  seeds  formed  the  basis 
of  the  product,  as  it  may  be  said. 

The  next  step  was  to  visit  the  hair-dressing  and 
manicure  parlors  patronized  by  the  rich.  Here,  at 
60  cents  each,  cash  in  advance,  over  two  gross  were 
sold.  The  label  and  bottle  appealed  strongly  and  the 
white,  rose-scented  lotion  was  fortunate  enough  to 
possess  novelty  as  well  as  merit. 

A  round  of  the  department  stores  disposed  of  several 
more  gross  at  50  cents  net  cash.  The  young  sales 
manager  believed  in  a  rigid  price  policy,  but  he  knew 
from  experience  that  a  certain  amount  of  capital  must 
be  secured  to  work  the  business  and  to  develop  it  to  a 
stage  where  a  price  poHcy  could  be  maintained. 

Next,  this  hustling  salesman  picked  out  five  cities 
averaging  25,000,  which  formed  a  ring  around  his  little 
country  town.  He  figured  that  in  four  weeks  he  could 
visit  each  of  these  five  cities  three  times.  In  those 
four  weeks  he  secured  enough  business  to  start  his 
company  on  a  state-wide  campaign.  In  the  year  fol- 
lowing the  campaign  brought  enough  revenue  to  sup- 
port two  men  in  comparative  comfort — $4,000  net. 

This  was  the  method  of  attack:  In  each  of  the  five 
cities  he  selected  on  his  first  trip  the  second-best  drug 
store.  To  its  buyer  he  showed  his  handsome  package, 
pointing  out  the  pleasing  rate  of  profit  based  on  a 
retail  price  of  $1  and  a  laid-down  cost  of  60  cents. 

''You  can't  expect  to  get  business  away  from  your 
competitors,"  he  argued,  *'so  long  as  you  hand  out  the 
same  goods  they  carry,  at  the  same  prices.  You  can't 
cut  prices,  because  if  you  do  the  others  will  follow  suit 


GETTING  THE  RIGHT  PLAN  123 

and  it  won't  be  long  before  you  are  all  losing  money, 
and  losing  it  mighty  fast." 

These  arguments,  with  a  few  sound  hints  on  mer- 
chandising the  lotion,  landed  a  dealer  in  each  city  on 
the  first  visit,  and  on  the  second  trip  the  first-grade 
stores  for  the  most  part  fell  into  line. 

"You  have  the  best  class  of  customers,  those  who 
would  hesitate  least  to  pay  $1  for  a  first-rate  lotion, 
yet  you  are  missing  profits  that  other  stores  are  making 
on  this  product,"  the  salesman  said. 

Further  arguments  as  to  the  lotion's  display,  and  a 
playing  up  of  the  large  sales  in  second-grade  stores, 
placed  goods  in  four  out  of  five  of  the  best  stores. 

Twelve  days  later,  on  his  third  trip,  the  sales  manager 
called  on  every  drug  store  worthy  of  credit,  every  de- 
partment-store toilet-goods  buyer,  and  every  barber 
shop.  Special  $25  assortments,  backed  by  records  of 
results  in  practically  all  the  best  drug  stores,  appealed 
strongly  to  buyers,  with  the  result  that  an  almost 
perfect  distribution  was  completed  on  schedule. 

THIS  MARKETING  PLAN  WAS  BUILT  UP  LOGICALLY  AND  HAS 
HAD  A  BIG  EFFECT  ON  ONE  CONCERN'S  GROWTH 

With  the  five  cities  well  fined  up,  state-wide  distribu- 
tion followed,  each  new  town  being  handled  as  well  as 
the  firm's  growing  income  permitted.  It  was  not  long 
before  the  company  could  indulge  in  the  luxury  of 
working  consumers  for  the  benefit  of  dealers.  The 
original  territory  was  covered  by  a  sampUng  crew  of 
two.  The  samplers  went  from  house  to  house  in  the 
late  fall,  soliciting  orders  for  the  best  drug  stores 

This  plan  was  followed  as  the  sales  territory  grew, 
and  is  still  used  in  some  territories.  It  has  been  an 
important  factor  in  the  concern's  steady  growth. 

In  contrast  to  the  methods  necessary  for  this  strug- 
gling, penniless  organization,  consider  the  plan  for 
marketing  a  new,   popular-priced   brand  of   tobacco 


124         ^IA]a<ETlNG  PLANS  AND  POLICIES 

brought  out  by  one  of  the  larger  tobacco  companies. 
Already  equipped  with  a  large  well-trained  sales  force, 
and  with  millions  of  dollars  back  of  it,  the  only  ques- 
tions were:  Would  advertising  create  sufficient  de- 
mand? And,  would  the  tobacco  appeal  to  smokers? 
The  company  had  taken  pains  to  produce  the  blend. 

Advertising  was  begun  in  an  eastern  city,  and  the 
goods  displayed  simultaneously  with  the  first  announce- 
ment. Special  attention  was  given  to  the  number  of 
repeat  orders.  "Find  out  as  well  as  you  can  if  the 
same  men  come  in  again  to  buy,"  was  the  substance  of 
instructions  given  retail  salesmen. 

As  soon  as  repeat  possibilities  were  demonstrated  a 
second  city  was  opened  up.  In  some  places  where 
retailers  were  stocked  by  jobbers  before  the  adver- 
tising was  scheduled  to  begin,  instructions  went  out  to 
"please  not  push  the  new  brand  until  the  advertising 
started"  in  that  city.  In  this  way,  adding  city  after 
city  with  demand,  the  whole  country  was  covered. 

In  spite  of  their  wide  difference,  the  two  marketing 
plans  described  have  certain  fundamentals  in  common. 
In  each  we  find  the  choice  and  coordination  of  those 
marketing  factors  which  were  suited  to  meeting  the 
individual  problem  of  the  concern. 

Sampling  on  an  infinitesimal  scale  seemed  in  the 
beginning  the  only  feasible  method  for  the  face-lotion 
company.  Printed  advertising  would  have  required 
more  money  than  the  concern  had.  For  the  tobacco 
company,  sampling  would  have  been  tedious  and  costly 
as  compared  with  the  hundreds  of  thousands  of  dollars 
spent  for  the  newspaper  publicity  done. 

Three  principal  steps  are  involved,  investigation  in- 
cates,  in  formulating  successful  marketing  plans.  Let 
U3  take  up  these  three  steps  in  order  as  follows:  (1)  in- 
vestigating to  determine  right  marketing  details;  (2) 
picking  the  right  trade  outlet;  and  (3)  coordinating 
factors  of  distribution  and  demand  creation. 


GETTING  THE  llKUiT  PLAN  125 

Taking  up  the  first  step  at  once,  thorough  investi- 
gation of  marketing  possibilities  is  recognized  by  suc- 
cessful business  men  everywhere,  as  an  indispensable 
preliminary  to  sound  conservative  merchandising.  The 
question  has  been  asked  many  times  doubtless:  If 
this  or  that  successful  concern  should  bring  out  an 
entirely  new  product  of  a  certain  sort,  what  marketing 
plan  would  it  pursue?  Investigation  indicates  that 
veterans  of  merchandising  are  readiest,  as  a  rule,  to 
devote  time  and  study  to  working  out  new  plans  for 
new  products;  to  investigate  and  to  test  many  various 
methods  in  order  to  find  the  right  ones;  and  to  avoid 
adhering  too  closely  to  marketing  plans  which  worked 
well  for  other  more  or  less  similar  products. 

One  of  the  country's  most  progressive  business  houses 
and  a  national  advertiser  of  many  years'  standing, 
recently  made  an  investigation  conspicuous  for  its 
thoroughness,  before  marketing  a  new  food  product. 
Instead  of  using  the  same  methods  which  had  proved 
unusually  successful  in  seUing  its  principal  product, 
this  concern  investigated  every  step  in  its  marketing 
plan  for  the  new  product,  and,  wherever  necessary, 
made  rigid  tests  to  determine  the  one  best  method. 

Before  giving  the  new  product  a  name,  the  company 
had  it  tested  for  several  months  under  practically  all 
possible  conditions.  Independent  commercial  labora- 
tories, cookery  schools,  restaurants,  and  families  in 
different  stations  of  life  all  used  the  product,  and  re- 
ported results.  When  this  information  was  tabulated, 
the  company's  chemists  made  several  changes  in  the 
product's  formula,  and  all  possible  uses  were  listed  for 
later  enumeration  in  advertising  copy. 

Several  months  then  were  spent  in  discussing  the 
shape,  color,  and  size  of  the  package  to  be  used.  Care- 
ful study  of  these  points  led  to  a  selection  which  prob- 
ably would  have  been  passed  over,  executives  of  the 
company  state,  in  hasty  and  superficial  consideration. 


126         MARKETING  PLANS  AND  POLICIES 

Following  these  tests,  an  entire  year  was  devoted  to 
trying  out  several  separate  marketing  plans.  Instead 
of  testing  one  plan  at  a  time,  several  plans  were  tried 
out  simultaneously.  No  personal  opinion  or  recom- 
mendation, or  even  the  unequaled  record  of  the  market- 
ing plan  of  the  company's  principal  product  was  per- 
mitted to  influence  the  decision  unduly. 

THIS  METHOD  IS  PERHAPS  NOT  ADAPTABLE  IN  WHOLE  BY  ALL 
CONCERNS,  BUT  IT  IS  SUGGESTIVE  TO  ALL 

In  one  city  of  50,000,  house-to-house  canvassing  was 
used,  and  the  product  was  introduced  to  practically 
every  housewife.  The  company's  regular  salesmen  sold 
goods  to  dealers  and  immediately  bought  back  at 
retail  prices  half  the  goods  thus  sold.  Canvassers  then 
took  over  the  goods  bought  from  dealers  and  sold  them 
to  housewives.  Not  only  was  this  method  unique 
enough  to  grip  the  attention  of  the  trade,  but  it  also 
demonstrated  the  salabihty  of  the  goods  and  the  com- 
pany's confidence  in  them,  and  assured  cooperation. 

In  another  city  house-to-house  canvassing  went  on 
without  any  approach  to  dealers.  In  still  another 
city  newspaper  advertising  bore  all  the  burden  of 
demand  creation  with  no  reference  to  dealers  except  a 
Une  of  copy  at  the  bottom  of  each  advertisement. 
Again  in  another  city,  newspapers  were  used  for  a 
carefully  planned  advertising  campaign  boosting  both 
dealer  and  product  in  the  same  ratio. 

Street-car  advertising  was  the  only  type  used  in  a 
fifth  city,  and  in  a  sixth  posters  and  outdoor  display 
were  tried  out.  Again,  store  demonstration  was  relied 
on  in  one  city,  and  in  an  eighth  all  methods  were  used. 

While  these  tests  of  distributive  and  advertising 
methods  were  in  progress,  investigators  were  at  work 
estimating  the  possible  total  consumption  of  the  prod- 
uct, the  strength  of  the  various  competitive  brands 
on  the  market,  and  the  main  attitude  toward  them. 


GETTING  THE  RIGHT  PLAN  127 

Results  of  these  several  investigations  were  tabulated 
and  carefully  analyzed  and  the  company  felt  that 
it  had  eUminated,  so  far  as  was  humanly  possible,  all 
guesswork  from  its  decisions.  Even  investigators  were 
chosen  only  after  being  tested  to  make  sure  that  they 
would  deliver  unbiased  reports.  Distribution  and  ad- 
vertising results  in  the  eight  cities  were  compared  with 
respect  to  cost  in  relation  to  sales,  and  with  considera- 
tion for  the  good-will  factor.  Although  this  preliminary 
work  cost  a  small  fortune,  the  company  is  convinced 
that  the  money  was  wisely  spent.  It  is  worth  while, 
its  executives  say,  to  know  rather  than  to  guess. 

Constant  study  of  conditions  and  markets  has  caused 
a  soap-manufacturing  concern  to  employ  several  dif- 
ferent marketing  plans  for  its  different  brands.  Al- 
though one  of  its  brands  is  a  leader  in  its  field,  the 
company  has  not  blindly  followed  the  same  methods 
used  to  introduce  it,  in  putting  new  soaps  on  the 
market.  In  fact,  the  marketing  plan  back  of  the  most 
successful  brand  never  has  been  duplicated  in  mer- 
chandising any  of  the  other  brands  brought  out. 

A  certain  percentage  of  the  buying  public  has  been 
educated,  this  company  found,  to  want  premiums  with 
certain  classes  of  goods.  It  might  be  possible  to 
educate  housewives  away  from  the  premium  idea,  but 
this  company  prefers  to  cash  in  on  the  sentiment  rather 
than  to  combat  it  with  a  chance  of  losing. 

Careful  study  of  different  sales  territories  led  the 
company  to  market  different  brands  of  premium  goods 
in  different  markets.  Chemical  analysis  of  water 
supphes  in  various  cities  showed  that  the  same  soap 
does  not  meet  all  the  requirements.  The  company 
varies  its  manufacturing  formulas  accordingly,  and  sells 
three  different  brands  in  its  different  territories. 

A  recent  sales  campaign  for  one  of  these  brands  brings 
out  the  care  with  which  each  step  is  timed  to  fit  in  with 
the  normal  demand  for  the  soap. 


128        MARKETING  PLANS  AND  POLICIES 

First,  a  crew  of  salesmen  called  on  every  grocer  in 
each  town  in  a  certain  territory.  They  made  no  at- 
tempt to  load  up  dealers  heavily,  but  only  made  sure 
the  dealers  had  some  stock,  for  ordinarily  distribution 
is  carried  on  through  jobbers.    Daily  reports  were  made. 

A  sampling  crew  followed  immediately.  Every  house- 
wife received  a  full-size  cake  of  soap,  and  was  told  that 
her  grocer  carried  it.  The  suppliers  had  nothing  to  do 
with  dealers  except  to  check  up  again  on  retail  stocks. 
Two  weeks  later  this  same  crew  made  a  second  house- 
to-house  trip  and  handed  out  coupons,  each  redeemable 
at  a  grocery,  entitling  a  housewife  to  two  cakes  of  soap 
for  the  price  of  one.  The  samplers  visited  the  trade 
on  this  trip  and  installed  displays  in  windows  and  on 
counters.  Daily  reports  also  kept  them  in  close  touch 
with  the  main  office  of  the  company. 

The  sales  department  now  had  a  clear  idea  of  local- 
ized conditions,  and  sent  the  sales  force  back  to  reach 
the  dealers  who,  it  had  been  determined,  formed  the 
weak  spots  in  distribution.  These  men  also  paid  in 
cash  for  all  the  coupons  turned  in  to  dealers — there  was 
no  long  waiting  by  a  dealer  for  his  check  from  the 
manufacturer's  home  or  branch  office. 

The  territory  now  was  stocked  with  soap  for  some 
time  to  come,  as  the  percentage  of  coupons  redeemed 
indicated  that  practically  every  family  in  it  had  three 
cakes  of  soap.  The  company  was  able,  therefore,  to 
determine  fairly  accurately  when  its  next  effort  should 
be  made.  A  second  distribution  of  coupons  usually 
takes  place  by  house-to-house  canvass  after  about  three 
months  have  elapsed.  Estimates  also  are  made  of 
sales  of  competing  brands,  and  with  salesmen's  reports 
they  make  possible  a  dependable  estimate  of  the  general 
sales  possibilities  at  any  time  in  the  year. 

The  experiences  of  these  two  concerns  emphasize  the 
importance  of  selecting  with  care  the  field  for  a  seUing 
experiment.     Both  companies  have  demonstrated  the 


^  GETTING  THE  RIGHT  PLAN  129 

effectiveness  of  the  right  sort  of  house-to-house  can- 
vassing in  their  distribution. 

Another  manufacturer's  house-to-house  campaign 
was  a  total  failure.  His  is  a  high-grade  food  product 
trade-marked  and  packaged,  and  appeals  to  people  to 
whom  price  is  a  secondary  consideration.  As  a  suitable 
field  for  a  house-to-house  demonstration,  he  therefore 
selected  an  exclusive  residence  section  in  a  large  city. 
He  felt  sure  that  his  product  would  interest  women 
living  in  this  fashionable  neighborhood. 

The  woman  demonstrator,  a  proved  artist  in  her  line, 
was  unable,  however,  to  sell  enough  goods  to  cover  her 
expenses.  In  rare  instances  only  was  she  able  to  reach 
the  housewife  at  all,  and  the  manufacturer,  convinced 
that  this  marketing  method  had  no  place  in  his  selling 
plan,  dropped  the  demonstration  idea  in  disgust.  A 
subsequent  attempt  in  a  more  logical  field  pointed  out 
his  real  mistake  in  not  selecting  his  field  wisely. 

VERY  OFTEN  IT  PROVES  VALUABLE  TO  INVESTIGATE  NEW 
MARKETING  POSSIBILITIES  THOROUGHLY 

Thorough  investigation  to  determine  possible  future 
sales  led  a  concern  manufacturing  a  furniture  specialty 
to  formulate  an  entirely  new  and  successful  marketing 
plan,  the  results  of  which  follow: 

The  company  has  obtained,  in  three  years,  distribu- 
tion in  95%  of  all  cities  above  50,000,  and  in  74%  of 
all  cities  above  10,000;  it  has  built  up  a  sales  organ- 
ization numbering  more  than  6,000  individual  units, 
and  operated  under  a  fixed  cost  to  the  company  of 
14J^%  of  the  selling  price,  or  23%  of  the  manufac- 
turing cost.  This  is  considered  an  unusually  low  cost 
for  initial  selling  and  distribution,  but  it  probably  will 
be  lowered  considerably  as  the  volume  increases. 

It  is  significant,  also,  that  this  company's  selhng 
organization  includes  the  country's  leading  retail  mer- 
chandisers— the  largest  stores  in  the  important  cities— 


130         MARKETING  PLANS  AND  POLICIES 

all  working  in  unison  on  a  carefully  built-up  marketing 
plan  controlled  by  the  manufactiffers.  And  the  largest 
distributor  in  this  group  is  quite  as  enthusiastic  over 
the  plan  and  the  results  it  is  bringing  as  is  the  smallest. 

Several  years  ago  the  company  marketed  its  entire 
product  in  five  neighboring  states.  Each  year  the  total 
volume  of  business  indicated  a  normal,  natural  increase. 
This  increase  was  due  largely  to  the  rapid  growth  and 
development  of  the  selling  territory  and  the  fact  that 
the  goods  produced  were  favorably  known  to  the  trade 
for  their  uniform  quality  and  dependabiUty.  The  time 
came,  however,  when  a  thorough  probe  of  the  marketing 
field  proved  conclusively  that  the  amount  of  additional 
business  possible  in  this  territory  was  limited.  Not 
only  had  its  first  rapid  growth  settled  down  to  a  normal, 
healthy  increase  of  population,  but  investigation  proved 
that  the  merchandising  methods  of  the  retailers,  as  well 
as  the  marketing  mcithods  of  manufacturers  supplying 
this  field,  were  entkely  demoraHzed. 

A  summary  of  the  investigation  of  the  marketing 
methods  of  manufacturers  and  the  merchandising  prac- 
tice of  retailers  in  this  market  brought  forth  the 
following  facts  which  were  significant: 

1.  That  each  dealer  carried  from  three  to  five  manufacturers' 
lines  regularly. 

2.  That  no  one  factory  product  had  any  individual  mark  by 
which  it  could  be  identified  by  consumers. 

3.  That  the  style  of  each  line  was  so  similar  that  without  an 
identifying  mark  of  the  manufacturer  it  was  impossible  for  con- 
sumers to  show  any  preference  for  any  one  manufacturer's  product. 

4.  That  dealers  usually  bought  from  the  first  factory  salesman 
that  came  into  their  store. 

5.  That  there  were  no  dealers  upholding  or  pushing  the  prod- 
ucts of  any  one  manufacturer  because  of  quality,  appearance, 
and  service  value  of  the  merchandise. 

6.  That  while  the  general  line  was  regarded  as  a  staple,  and 
had  to  be  manufactured  to  meet  supposedly  fixed  prices  to  dealers, 
there  was  no  fixed  standard  of  prices;   rather,  an  unwritten  law 


GETTING  THE  RIGHT  PLAN  131 

existed  which  was  interpreted  by  both  manufacturers  and  dealers 
to  mean,  "Get  all  the  traflSc  will  bear." 

7.  That  every  dealer  was  a  law  unto  himself  and  that  his 
sales  policy  to  customers  was  catch  as  catch  can. 

8.  That  these  conditions  resulted  in  dealers  receiving  at  times 
a  50%  profit,  100%  profit,  and  in  some  instances  200%  or  300% 
profit,  while  at  other  times  they  were  compelled  to  sell  at  little 
or  no  profit. 

9.  That  the  whole  furniture  and  general  merchandising  trade 
of  this  territory  was  in  a  more  or  less  chaotic  condition. 

10.  That  merchants  throughout  this  market  were  more  con- 
cerned over  mail-order-house  competition  than  any  other  problem. 

11.  That  under  these  conditions  it  was  impossible  for  any  one 
manufacturer  to  do  more  than  a  certain  amount  of  business,  re- 
gardless of  the  quahty,  appearance,  or  value  of  merchandise. 

To  keep  on  marketing  its  products  in  this  territory 
under  these  conditions  held  Uttle  promise  of  future 
profits.  A  new  plan  was  necessary,  and  the  company 
turned  to  advertising  as  a  means  of  educating  the  public 
to  make  a  choice  between  similar  products.  The  un- 
certainities  of  advertising  caused  anxiety;  yet  if  it 
worked  there  lay  ahead  an  equalizing  of  rush  and 
slack  seasons  in  production,  the  lowering  of  overhead 
expenses,  the  gaining  of  better  profits,  of  larger  divi- 
dends, and  the  guaranteeing  of  steady  employment  at 
better  salaries  and  wages  to  employees. 

Accordingly,  the  company  trade-marked  its  line,  and 
backed  the  trade-mark  with  a  guarantee  of  satisfaction. 
A  five-year  campaign  was  started  in  farm  papers 
covering  the  five  states  and  primarily  every  effort  was 
bent  to  stimulate  dealers'  sales. 

Results  were  slow  as  had  been  expected,  but  in  six 
months  live  dealers  reported  activity  in  the  company's 
line.  People  began  to  take  an  interest  and  at  the  end 
of  the  first  year  sales  showed  an  fair  increase. 

During  the  second  year  of  the  campaign  there  was 
a  marked  tendency  for  dealers  to  confine  their  buying 
to  the  advertised  line,  and  to  strengthen  their  stock  by 


132         MARKETING  PLANS  AND  POLICIES 

mail  orders  direct  from  the  factory.  There  was  a 
marked  increase  in  the  amount  of  advertising  of  the 
line  by  dealers,  and  the  number  of  applications  from 
dealers  for  exclusive  agencies  began  to  multiply.  By 
the  end  of  ^he  second  year  it  was  apparent  to  this 
company  that  it  was  getting  a  considerably  larger 
portion  of  the  total  volume  of  business  in  this  territory 
than  before  undertaking  the  campaign,  that  the  adver- 
tising had  had  a  standardizing  effect  on  the  merchan- 
dising methods  of  dealers,  and  that  ultimately  .the  sales 
territory  would  have  to  be  extended. 

How  fast  sales  of  the  advertised  article  increased  and 
the  enlarged  advertising  expenditm-es  that  accompanied 
the  growth  is  shown  in  the  following  table.  Letting 
100%  represent  total  sales  of  the  year  before  the  adver- 
tising started  the  percentage  increase  of  following  years 
is  shown  in  the  first  column.  You  will  note  that  sales 
almost  tripled  in  one  year,  and  some  of  the  subsequent 
increases  were  even  larger. 

Scale  of  increases  in  Advertising  expenditure 

sales  volume  after  based  on  first  year's 

advertising  was  begun*  appropriation  as  100% 

1910 270%  100% 

1911 510%  100% 

1912 2,230%  133%, 

1913 5,140%  187%, 

1914 6,940%  350% 

1915 7,510%  380% 

When  this  company  entered  the  national  field  about 
four  years  after  beginning  its  farm-paper  campaign, 
investigation  disclosed  general  trade  conditions  quite 
similar  to  those  which  had  originally  existed  in  the 


*The  first  year  advertising  was  run,  the  sales  volume  jumped  to  nearly  three 
times  its  size  before  advertising  began.  The  fact  that  sales  did  not  continue  their 
relative  increase  during  the  last  two  years  is  not  surprising  in  view  of  the  extreme 
depression  that  prevailed  in  many  industries.  The  increase  during  this  period,  how- 
ever, is  worthy  of  consideration,  as  many  industries  showed  a  falling  off  of  fiom  10% 
to  40%.     In  1915  the  first  national  space  was  used  by  the  company. 


GETTING  THE  RIGHT  PLAN  133 

smaller  territory.  The  company,  therefore,  approached 
the  furniture  trade  not  only  with  a  hne  of  demonstrated 
worth  and  advertising  ability,  but  also  with  a  carefully 
worked  out  marketing  plan  for  its  product. 

"In  constructing  our  marketing  policy  and  selling 
plan,"  says  the  company's  vice-president,  "we  not 
only  operated  against  all  of  the  traditions  of  the  fur- 
niture industry,  but  we  reversed  what  is  often  con- 
sidered the  safer  method  in  attempting  to  gain  national 
distribution  for  our  product.  Instead  of  beginning 
with  small  towns,  where,  it  is  true,  an  equal  volume  of 
business  can  be  obtained,  and  working  from  this  field 
to  the  city  trade — which  many  state  to  be  the  safer, 
easier  and  quicker  journey  for  a  young  and  unknown 
manufacturing  house  to  make — we  began  with  not  only 
the  largest  cities,  but  with  the  largest  recognized  mer- 
chandisers in  America.  Our  theory  was  that  if  our 
line  sold  well  in  the  larger  cities,  the  indorsement  of 
the  big  merchants  would  make  selling  the  small  town 
merchants  an  easy  task.    And  it  has. 

ABSOLUTE  FRANKNESS  IN  PRESENTATION  WAS  ONE  OF  THE 
REASONS  FOR  THE  BIG  SUCCESS  OF  THIS  PLAN 

"In  presenting  our  plan  to  the  largest  merchandisers 
in  the  country,  we  said  to  them  in  effect:  'First,  we 
have  something  to  sell,  but  more  important,  we  offer 
you  a  carefully  constructed  sales  plan  which  is  open 
to  your  criticism  and  suggestions.  Under  our  marketing 
plan  you  shall  have  no  advantages  or  inducements 
not  open  to  every  dealer,  large  or  small.  We  ask 
and  expect  that  you  will  sell  our  goods,  at  prices 
to  be  named  by  us,  these  prices  to  assure  you  at- 
tractive profits — larger  profits,  perhaps,  than  you 
have  ever  made  on  similar  goods,  day  in  and  day 
out.  In  return  for  your  cooperation  we  bring  you 
absolute  assurance  that  every  dealer  will  accept  this 
plan  in  good  faith.    If  he  does  not,  he  cannot  become 


134         MARKETING  PLANS  AND  POLICIES 

a  unit  in  our  sales  organization.  Furthermore,  we 
assure  you  that  in  asking  you  to  treat  every  one  of 
yoiu-  customers  alike,  giving  all  the  advantage  of  the 
same  price,  we  shall  charge  every  dealer,  big  and  little, 
the  same  price.'  This  selling  plan  struck  the  imagina- 
tion of  the  trade  and  met  with  instant  approval. 
■*  "For  a  long  time,  manufactiu-ers — particularly  small 
manufacturers — have  been  afraid  to  face  big  retailers, 
working  under  the  impression  that  it  was  necessary  to 
offer  the  big  retailer  large  price  inducements  to  handle 
their  merchandise.  Many  large  retailers,  of  course, 
demand  this  concession  today.  We  have  found  that 
if  goods  are  made  right,  as  to  appearance,  quality,  and 
service;  if  they  are  priced  right,  to  allow  a  liberal 
margin  of  profit  to  dealers;  and  if  you  stand  behind 
them  with  an  absolutely  fair  and  square  marketing 
pohcy — you  can  take  them  to  the  largest  and  most 
exclusive  retailers  in  the  line  and  sell  them  on  the  same 
basis  as  you  can  sell  to  the  crossroads  merchants.  Last 
year  one  of  the  largest  department  stores  in  the  coun- 
try sold  more  of  our  goods  than  our  entire  output 
equaled  the  first  year  we  entered  this  product  in  the 
territorial  market.  They  bought  on  the  same  basis, 
and  at  the  same  price,  as  do  our  smaller  dealers  in  the 
country  districts.     They  have  never  asked  discount." 

So  much  for  this  concern's  marketing  plan.  It 
developed  as  a  logical  outgrowth  of  thorough  investi- 
gation and  analysis,  it  built  a  relatively  small  concern 
into  one  of  the  largest  in  its  line,  and  it  marked  a  pioneer 
movement  in  a  field  which  was  fertile  and  ready  to 
adopt  a  new  and  progressive  sales  idea. 

An  unusual  marketing  plan  worked  out  by  a  middle 
western  concern  manufacturing  women's  waists  and 
blouses,  enabled  the  company  to  overcome  the  seasonal 
disadvantage,  and  to  reduce  selling  expense  75%. 
Where  formerly  this  concern  had  periods  of  heavy 
demand  and  corresponding  periods  of  idle  machinery 


GETTING  THE  RIGHT  PLAN  135 

and  space,  manufacturing  and  costs  are  now  spread 
evenly  over  the  year.  Where  large  sums  were  spent 
for  samples  and  salesmen's  expenses,  samples  are  almost 
entirely  done  away  with,  and  it  has  fewer  men. 

The  plan,  in  brief,  is  this.  The  company  contracts 
with  individual  dealers  to  furnish  each  dealer  fresh 
merchandise  each  week.  The  dealer  signs  a  contract 
to  take  a  year's  supply.  Each  dealer's  needs  are  care- 
fully determined  by  study  of  local  conditions,  and 
quantities  are  regulated  to  make  weekly  turnovers  as 
nearly  certain  as  possible. 

The  advantages  of  the  plan  are  apparent.  Part  of 
the  generous  saving  has  gone  into  the  goods,  so  that 
dealers  are  getting  superior  merchandise — a  fact  which 
they  appreciate.  Instead  of  six  salesmen,  only  one 
man  now  is  employed.  All  contracts  are  made  by  the 
manufacturer  himself  or  by  this  one  salesman.  No 
samples  are  necessary,  and  no  models,  as  the  dealers 
seldom  come  to  the  factory.  And  an  important 
economic  betterment  has  come  from  steady  employ- 
ment of  factory  help,  resulting  in  the  elimination  of 
many  wastes,  and  the  production  of  better  goods. 

The  second  important  step  in  formulating  a  market- 
ing plan,  as  indicated  by  investigation  and  analysis  of 
hundreds  of  successful  plans — picking  the  most  profit- 
able trade  outlets — logically  follows  our  discussion  of 
investigating  to  determine  marketing  details. 

It  may  appear  to  many  that  the  wholesaler's  dis- 
tribution task  is  far  simpler  than  the  manufacturer's, 
and  no  doubt  it  is  in  many  instances.  It  is  worth 
remembering,  however,  that  many  trade  barriers,  long 
thought  insurmountable,  are  rapidly  being  broken  down. 
The  wholesale  hardware  man  is  nothing  loath  to  sell 
tio  grocers  if  he-  has  stock  they  want,  and  so  it  is  with 
other  hnes.  Each  year,  it  seems,  a  wholesaler  finds 
certain  limitations  abolished  which  formerly  were 
arbitrarily  set  upon  his  selling  activities. 


lao        MARKETING  PLANS  AND  POLICIES 

Modern  business  practice  includes  a  wide  range  of 
distributive  processes,  considering  manufacturers  alone. 
Recent  analysis  of  the  distributive  policies  of  97  manu- 
facturing concerns  shows  that  16  sell  to  jobbers,  17  to 
retailers,  10  through  agencies,  and  7  dii-ect  to  con- 
sumers; 28  sell  to  jobbers  and  retailers;  13  to  retailers 
and  through  agencies;  4  to  jobbers,  to  retailers,  and 
through  agencies;  1  to  retailers  and  consumers;  and  1 
to  jobbers,  retailers,  and  consumers. 

Let  us  take  up  in  order,  then — under  our  second 
principal  heading — picking  the  right  trade  outlook — 
the  problems  of  getting  and  maintaining  distribution 
through  jobbers,  retailers,  agencies,  and  selling  direct. 

GETTING  THE  RIGHT  RELATIONS  BETWEEN  MANUFACTURER 
AND  JOBBER  SOMETIMES  IS  DIFFICULT 

In  lines  of  business  where  jobbers  are  desirable  for 
manufacturers'  distributive  schemes,  the  jobbers  often 
may  render  invaluable  assistance  in  getting  retailers' 
cooperation.  The  manufacturer's  task,  then,  it  is 
agreed,  is  to  get  the  jobber  in  a  friendly  attitude. 

''Whenever  a  problem  comes  up  affecting  our  jobber 
policy,"  said  the  sales  manager  of  one  house,  "we 
always  ask  this  question:  'If  we  were  jobbers  what 
would  we  want  a  manufacturer  to  do  under  like  cir- 
cumstances?' The  answer  usually  is  simple,  and  it 
shapes  our  poUcy  for  us.  We  may  not  be  able  to 
adhere  throughout  to  what  the  jobber  would  like,  but 
we  make  it  clear  to  him  that  we  started  our  analj^sis 
from  his  point  of  view  rather  than  our  own,  and  that 
wehave  held  his  interests  to  be  as  important  as  our  own, 

"Long  association  with  us  has  taught  our  jobbers 
that  we  practice  as  well  as  talk  this  pohcy,  and  as  a 
result,  we  have  a  distribution  of  which  any  manu- 
facturer might  well  be  proud." 

One  fundamental  reason  for  the  cooperation  which 
jobbers  give  the  company  just  mentioned  probably  is 


GETTING  THE  RIGHT  PLAN  137 

the  advertising  which  the  company  has  done.  It  is 
exclusively  trade-paper  advertising  and  represents  a 
very  small  percentage  of  the  appropriation,  yet  it  created 
a  demand  for  the  product,  thus  relieving  the  company's 
jobbers  of  any  anxiety  about  the  money  invested  in 
the  goods  they  have  in  stock.  The  company's  attitude 
always  has  been  expressed  thus:  ''If  we  can  increase 
our  jobbers'  sales  our  orders  will  increase  automatically. 
We  will  therefore  pay  more  attention  to  helping  them 
sell  more  goods  by  showing  them  how  to  sell."  Pos- 
sibly this  policy  accounts  in  large  part  for  annual  sales 
running  well  into  eight  figures  for  this  company. 

Frequent  letters  and  circulars  beginning  "To  Para- 
gon Jobbers"  keep  the  jobbers  fully  informed  about  all 
the  company's  advertising  activities.  Plans  and  ideas 
a-plenty  for  getting  new  markets  and  boosting  sales 
are  constantly  forthcoming.  In  fact,  jobbers  are  made 
to  feel  that  they  are  on  practically  the  same  plane  as 
the  company's  sales  force.  In  the  combination  of  its 
own  and  its  jobbers'  salesmen  the  company  has,  there- 
fore, a  highly  effective  seUing  organization. 

When  a  new  product  is  put  before  jobbers  they  fre- 
quently say,  in  effect:  ''Create  the  demand,  and  we 
will  stock  the  goods.  But  we  won't  push  merchandise 
for  which  no  demand  exists.  Our  selUng  has  to  be  done 
quickly.  Our  margin  of  profit  is  small.  We  can't 
afford  to  take  any  chances  at  all." 

That  there  is  some  reason  in  this  no  one  can  deny, 
and  it  is  the  manufacturer  who  reahzes  and  makes 
allowance  for  the  jobber's  problems,  and  shapes  his 
own  pohcy  accordingly,  who  usually  wins  out,  manu- 
facturers agree.  Hence  many  manufacturers  say  to 
their  salesmen:  "Never  mind  the  jobber.  Go  to  the 
retail  trade  for  your  orders  for  awhile,  and  ask  each 
dealer  to  name  his  jobber.  Turn  the  orders  over  to 
these  jobbers,  and  they  will  handle  the  goods  fast 
enough  to  please  any  business  man." 


138         MARKETING  PLANS  AND  POLICIES 

An  interesting  campaign,  noteworthy  for  its  com- 
pleteness and  thoroughness,  as  well  as  for  its  handling 
of  the  jobber  situation,  was  recently  carried  out  in  an 
eastern  city  by  a  food-specialty  manufactm-er.  Al- 
though the  product  had  been  on  the  market  for  a 
number  of  years  and  large  sums  had  been  spent  on  its 
advertising,  so  little  progress  had  been  made,  that  this 
city  still  might  have  been  termed  a  new  market.  Its 
population  generally  was  ignorant  of  the  product. 

An  entirely  new  attack  was  decided  upon.  The 
company  knew  the  merit  of  its  product  and  had  plenty 
of  money  to  ''put  over"  an  effective  distribution  plan 
if  one  could  be  found.  Preliminary  estimates  as  to  the 
cost  of  getting  the  right  distribution  in  this  city  ran 
from  S50,000  to  $150,000  or  a  trifle  more. 

It  finally  was  decided  to  make  jobber  education  the 
keynote  of  the  new  campaign.  One  of  the  company's 
most  successful  salesmen  was  assigned  to  call  on  the 
jobbers  and  to  supervise  the  entire  selling  effort.  He 
devoted  much  time  to  educational  endeavor  among 
jobbers,  but  made  but  slight  effort  to  sell  any  goods. 
In  the  meantime  a  force  of  specialty  salesmen  was 
educating  retail  grocers  and  stocking  them  with  small 
quantities.  The  advertising  in  connection  was  prin- 
cipally letters  and  booklets  mailed  to  dealers'  cus- 
tomers. Thus,  the  consumer  was  made  a  lever  upon 
the  dealer,  and  the  dealer,  in  turn,  upon  the  jobber. 
The  jobbers  were  impressed  with  the  educational 
selUng  argument  advanced  to  them  and  signified  their 
readiness  to  cooperate,  provided  the  entii'e  campaign 
showed  results.  Results,  when  they  came,  were 
gratifying,  particularly  in  the  good  will  which  the 
campaign  created  all  along  the  line. 

In  certain  lines — notably  certain  classes  of  food 
products  and  textiles — manufacturers  have  been  slow 
to  take  over  any  of  the  jobber's  merchandising  activ- 
ities.   Problems  of  production  have  monopolized  the 


GETTING  THE  RIGHT  PLAN  139 

attention  of  manufacturers  to  such  an  extent  that 
manufacturers'  agents,  brokers,  and  jobbers  have  be- 
come firmly  entrenched  and  have  wielded  influence 
which  has  amounted,  in  some  instances,  to  complete 
domination  of  manufacturers'  distribution  pohcies. 

One  textile  manufacturer  found  a  way  out  of  a 
difficulty  like  this.  He  trade-marked  his  products,  and 
then  carried  on  the  unique  plan  of  trade-marking 
garments  with  the  making  of  which  he  had  nothing 
whatever  to  do,  but  which  were  made  from  his  fabrics. 
He  then  went  direct  to  the  public  by  means  of  adver- 
tising, featuring  the  trade-marked  garments.  Profits 
came  quickly  from  increased  sales  of  fabrics  to  manu- 
facturers authorized  to  make  garments  with  his  trade- 
mark label  on  them.  This  manufacturer  demonstrated 
the  wisdom  of  creating  ''consumer  demand,"  and  he 
declares  that  when  strong  consumer  demand  does 
exist  for  a  product,  all  intermediate  agencies  are  glad 
to  handle  it,  for  their  own  costs  are  reduced,  and 
turnovers  speeded  up  to  a  marked  extent. 

THE  VALUE  OF  THE  TRADE-MARK  IS  WELL  DEMONSTRATED 
BY  THE  EXPERIENCE  OF  THIS  MANUFACTURER 

The  strength  and  solidity  of  the  good  will  this  man- 
ufacturer created  by  advertising  his  label  to  the  pubHc 
was  forcibly  demonstrated  when  the  campaign  was 
revived  after  a  lapse  of  several  years — a  lapse  due  to 
fashion  changes  which  had  automatically  eliminated 
his  trade-marked  garment  from  the  market.  As  soon 
as  the  garment  came  back  into  style  the  advertising 
was  begun  again  on  a  generous  scale,  and  results  proved 
that  the  manufacturer's  good  will  had  suffered  little. 

Going  on  to  an  analysis  of  distributing  goods  through 
retail  dealers  we  find  a  more  complex  problem,  per- 
haps, than  the  manufacturer  has  in  deahng  with  the 
jobber.  We  will  take  up  the  distributive  function  of 
retailers  as  it  relates  to   manufacturers'   and   whole- 


140        MARKETING  PLANS  AND  POLICIES 

salers*  selling  costs  and  plans  for  getting  distribution. 
Summed  up  briefly,  the  retailer's  attitude  toward 
products  he  sells  usually  is  much  like  that  of  the  jobber, 
it  was  found.  Some  goods  he  is  glad,  even  anxious  to 
handle,  for  the  demand  is  ready-made  and  the  margin 
of  profit  is  attractive.  Other  goods  he  is  compelled 
to  carry  to  meet  consumer  demand,  although  he  would 
willingly  substitute  other  brands  which  pay  him  more. 

One  difficulty  which  a  manufacturer  often  has  to 
overcome  is  the  slowness  of  many  retailers  to  accept 
with  good  grace  a  smaller  percentage  of  profit,  even 
though  the  manufacturer's  advertising  may  have  in- 
creased the  dealers'  total  profits  by  increasing  the 
volume  of  his  sales  of  the  manufacturer's  goods,  and 
thus  speeding  up  the  retailer's  stock  turn  and  reducing 
to  a  minimum  his  expense  of  handling  the  goods.  The 
wise  retailer,  manufacturers  contend,  stocks  brands 
for  which  popular  demand  exists,  and  accepts  if  nec- 
essary, a  smaller  profit  per  unit  sale,  but  all  retailer? 
do  not  adopt  this  attitude. 

Taking  retailers  frankly  into  its  confidence  has  en- 
abled one  hosiery  company  to  keep  its  dealers  well 
fined  up,  in  spite  of  reductions  in  the  dealer's  unit  sale 
profit  which  have  become  necessary.  On  the  two  or 
three  occasions  when  price  readjustments  have  been 
necessary — retail  prices  of  this  product  are  controlled 
largely  by  competition — this  company  placed  all  its 
cards  on  the  table,  explained  to  the  dealers  through 
its  salesmen  that  its  own  profits  had  suffered  in  pro- 
portion to  theirs,  and  that  salvation  for  both  lay  in 
more  vigorous  selling  tactics.  The  company's  frank- 
ness, backed  by  its  reputation  for  consistent  fairness 
toward  its  trade,  has  made  its  good  will  secure  and  has 
helped  to  maintain  a  steady  increase  in  volume. 

"I  always  reason  this  way,"  says  the  sales  manager 
of  this  company:  ''The  dealer  is  a  human  being  like 
myself.    He  has  the  same  kind  of  interests  and  am- 


GETTING  THE  RIGHT  PLAN  141 

bitions.  He  is  concerned  most  of  all  with  his  own  store. 
He  wants  his  business  to  grow  and  make  more  money. 
It's  easy  for  me,  then,  to  get  his  attitude,  and  I  know 
that  he  will  consider  carefully  any  plan  or  policy  we 
adopt,  before  finally  turning  it  down. 

''Usually  he  is  a  reasonable  chap— this  dealer.  Like 
the  rest  of  us,  he  has  to  put  up  with  disappointments 
now  and  then.  If  he  knows  all  the  why's  and  where- 
fores of  these  disappointing  occurrences,  he  is  more 
disposed  to  be  reasonable.  But  if  he  is  left  in  ignorance, 
the  chances  are  he  will  feel  and  show  resentment.  Our 
pohcy,  therefore,  is  to  tell  him  about  everything  affect- 
ing our  relations.  We  want  him  to  feel,  and  try  to 
make  him  feel,  that  we  are  his  friends,  and  that  our 
business  has  no  secrets  from  him." 

Similar  experiences  of  other  concerns  demonstrate 
that  this  broadminded  pohcy  seldom  fails  of  success. 
Ignoring  the  dealer,  on  the  other  hand,  may  break 
down  good  will  to  an  alarming  extent.  Witness  the 
instance  of  a  food-specialty  manufacturer  who  woke 
up  to  find  himself  thoroughly  disliked  by  his  retail 
trade  generally,  simply  because  he  has  held  it  in  con- 
tempt. With  almost  a  100%  distribution,  due  to  his 
large  expenditure  in  advertising,  this  manufacturer 
argued — rightly  or  wrongly — that  he  had  made  the 
dealer  nothing  but  an  order-filler,  had  built  up  steady 
retail  sales,  and  had  quickened  retail  turnover  in 
exchange  for  paying  the  dealer  a  smaller  profit  per 
unit  sale.  His  advisers  contended,  not  merely  that 
his  policy  was  wrong,  but  that  he  might  easily  have 
retained  his  dealer  good  will  by  a  little  educational 
work  and  a  show  of  interest  in  the  dealer's  welfare. 

That  the  pohcy  of  looking  at  questions  from  the 
dealer's  angle  is  equally  as  effective  in  getting  distribu- 
tion as  in  holding  it,  is  illustrated  by  a  test  campaign 
of  one  package-food-product  manufacturer.  The 
purpose  of  the  test  was  to  determine  the  value  of 


142        MARKETING  PLANS  AND  POLICIES     . 

advertising  as  an  aid  to  getting  distribution.  Six  towns 
were  chosen  in  a  territory  made  difficult  by  heavy 
competition,  and  three  men  were  sent  out  armed  with 
nothing  but  folders  illustrating  the  advertising. 

The  two  factors  in  this  campaign  which  impressed 
the  dealers  most  were  the  advertisements  scheduled 
for  local  newspapers  in  the  six  towns,  and  a  special  case 
containing  about  half  the  number  of  packages  con- 
tained in  the  smallest  unit  order  the  company  sold 
ordinarily.  The  salesmen's  talk  centered  on  those  two 
factors,  emphasizing  the  fact  that  the  company  proved, 
by  putting  out  a  special  introductory  quantity,  that  it 
did  not  want  to  overload  dealers,  and  that  it  would 
confine  its  advertising  effort  to  local  newspapers  to 
move  the  goods  off  the  dealers'  shelves. 

ALTHOUGH  THE  SELLING  COST  WAS  HIGH  AT  THE  START,  THE 

RESULTS  SECURED  M^RE  WORTH  IT 

Results  were  remarkable.  An  average  dealer  distri- 
bution of  87.3%  was  obtained.  The  lowest  figure 
from  the  six  towns  was  75%,  and  the  highest  97%. 
Investigation  later  brought  out  the  fact  that  the  small 
introductory  order  made  a  convincing  selling  argu- 
ment. The  willingness  of  the  manufacturer  to  sell  a 
small  initial  order  and  thus  to  guarantee  his  product 
to  the  dealer,  and  to  advertise  in  local  newspapers  to 
move  the  goods  quickly,  convinced  dealers  of  his  con- 
fidence in  his  own  product.  This  confidence  sold  the 
dealer  more  quickly,  it  was  agreed,  than  price  or  quahty 
arguments  could  have  done.  The  manufacturer  as- 
sumed the  risk  of  advertising  failure  and  depended  on 
reorders  to  reduce  his  selling  cost,  which  was  abnor- 
mally high  at  the  start,  it  may  be  stated. 

Not  all  manufacturers,  of  course,  can  afford  to  spend 
money  in  this  way,  deferring  indefinitely  the  realization 
of  net  profits.  The  point,  however,  is  not  the  details  of 
the  campaign  but  the  effect  on  retail  dealers  of  a  policy 


GETTING  THE  RIGHT  PLAN  143 

which  shows  just  as  careful  consideration  of  retailer's 
trials  and  tribulations  as  of  the  manufacturer's. 

Two  special  classes  of  retail  estabhshments — depart- 
ment stores  and  chain  stores — show  marked  similarity 
to  jobbers,  insofar  as  their  distributive  functions  are 
concerned.  WTiile  the  dealer  policy  employed  by  the 
hosiery  and  package-food  manufacturers  usually  is 
just  as  effective  in  dealing  with  department  stores  and 
chain  store  systems,  these  two  types  of  distributing 
agencies  do  offer  problems,  because  of  their  location, 
size  and  buying  power,  which  demand  the  particular 
study  and  attention  of  business  men. 

Investigation  by  a  merchandising  expert  of  the 
department-store  situation  in  practically  all  cities  of 
more  than  50,000,  and  also  in  a  number  of  smaller 
cities,  revealed  an  average  annual  per  capita  expendi- 
ture of  S32.90  in  department  stores.  This  figure  was 
determined  by  dividing  the  estimated  trading  popula- 
tion in  each  city  into  the  department-store  volume  of 
business  in  the  city  and  striking  an  average.  It  is 
significant  that  in  cities  showing  figures  appreciably 
above  or  below  this  average,  economic  causes  for  the 
differences  were  plainly  evident.  The  lesson  drawn  by 
the  investigator  is  that  a  manufactiu-er,  with  the  aid 
of  this  average  figure,  may  estimate  with  reasonable 
accuracy  the  department-store  volume  of  business  in  a 
city  without  visiting  that  city  simply  by  knowing  the 
economic  conditions  surrounding  it  and  its  population. 

Retail  merchants,  this  expert  points  out,  five  among 
local  influences  which  monopolize  their  attention. 
Comparatively  few  visit  the  wholesale  markets  or  in 
any  other  way  brush  up  acquaintance  with  the  outside 
commercial  world.  They  feel,  therefore,  that  they  are 
the  creators  of  their  own  sales  volumes,  which  vary 
according  to  their  respective  abilities  as  merchants. 
"This  is  true  only  within  certain  limits,"  says  the 
Investigator,   "and  these  limits  are  wholly  beyond 


144        MARKETING  PLANS  AND  POLICIES 

control  of  any  individual  merchant.  The  limits  are 
determined  by  national  movements,  or  by  business 
tendencies  which  are  national  in  extent.  These 
national  influences  tend  to  fix  a  volume  of  business 
beyond  which  a  retailer  may  not  grow. 

"There  is  nothing  mysterious  about  these  laws," 
he  continues.  "The  volume  of  a  city's  business  de- 
pends essentially  upon  its  own  and  its  tributary  pop- 
ulation, the  wealth  at  the  disposal  of  the  population, 
their  nationality  and  extent  of  education,  and,  finally, 
upon  the  breadth  of  vision  and  the  energy  of  its  mer- 
chants. The  localized  demands  for  merchandise 
which  many  merchants  pride  themselves  on  judging 
are  of  little  importance  in  the  long  run,  for  they  give 
way  to  the  strong  assertions  of  national  tendencies." 

For  the  national  merchandiser  the  lesson,  he  points 
out,  is  this.  He  must  put  himself  in  ahgnment  with  the 
operation  of  these  national  tendencies  or  laws — must 
make  them  help  him  to  pull  with  the  current  rather 
than  across  or  against  it.  Just  as  soon  as  he  attempts 
distributing  and  merchandising  pohcies  based  on  local 
pecuharities  he  finds  himself  entangled  in  a  maze  of 
details  soon  becoming  worthless. 

Here  is  an  instance  in  point.  An  eastern  concern 
which  makes  a  patented  line  of  women's  wear,  has 
struggled  for  several  years  to  estabhsh  its  line  and  to 
get  a  wide  enough  distribution  to  warrant  national 
advertising  on  a  big  scale.  Briefly  analyzed,  this  com- 
pany's policy  is  to  establish  its  line  in  influential  stores, 
first  working  from  large  cities  to  smaller  connnunities, 
and  to  assist  retailers  in  advertising  the  goods  rather 
than  to  advertise  them  itself,  on  the  ground  that  in 
any  given  locality  buyers  have  more  confidence  in 
advertising  by  their  own  retailers  than  in  that  of 
manufacturers.  Considerable  money  is  spent  each 
year  by  the  company  for  advertising  but  it  is  all 
directed  at   the  dealer — none  at  consmners. 


GETTING  THE  RIGHT  PLAN  145 

Its  selling  plans  are  comprehensive,  and  are  carried 
out  with  vigor,  and  in  those  stores  where  support  has 
been  enlisted  sales  are  encouraging.  But  in  spite  of  all 
the  schemes,  stunts,  and  persistent  plugging  away, 
progress  is  painfully  slow.  Some  department  stores — 
looked  upon  by  the  manufacturer  as  necessary  to 
effective  distribution — refuse  to  put  in  the  line.  Like 
the  jobber  they  say:  "Create  a  demand,  and  we'll 
handle  the  goods.     We  haven't  time  to  do  this. " 

HERE  IS  THE  VIEW  OF  ONE  PROGRESSIVE  BUSINESS  MAN  ON 
HANDLING  SALES  TO  DEPARTMENT  STORES 

Another  manufacturer  holds  a  different  view  of  the 
department-store  problem — as  regards  the  larger  cities, 
at  any  rate.  He  recommends  that  manufacturers  study 
carefully  the  department-store  situations  in  the  largest 
cities,  determine  which  stores  show  quahties  of  genuine 
leadership,  and  then  tie  up  to  them  for  active  coopera- 
tion and  distribution.  For  choosing  the  leaders,  he 
suggests  analysis  along  the  hues  of  merchandising 
methods,  service,  price-cutting  policy,  sales  of  adver- 
tised goods  and  of  branded  goods  generally,  overhead- 
expense  watching,  methods  of  cooperation,  poHcy  of 
competition,  and  the  personnel  of  the  whole  force. 

"The  well-know  reluctance  of  department  stores  to 
feature  advertised  brands  of  goods  or  in  some  stores  to 
carry  them  at  all,"  this  manufacturer  says,  "is  because 
the  manufacturer  does  not  make  his  proposition  suffi- 
ciently attractive  to  the  department  store.  The  great 
retail  establishments  spend  large  sums  to  draw  trade 
and  build  good  will.  The  manufacturer  with  an  adver- 
tised brand  frequently  allows  a  smaller  margin  than  the 
store's  normal  profit  rating.  A  competitor  comes  along 
with  an  equally  good  line,  unadvertised  but  offering  a 
better  profit,  and  out  goes  the  advertised  fine." 

Investigation  clearly  indicates  that  considering  the 
"other  man's  interest  is  sound  poHcy  for  wholesalers 


146         MARKETING  PLANS  AND  POLICIES 

and  manufacturers  to  adopt  in  getting  and  maintaining 
distribution.  The  seller  is  in  the  position  of  a  seeker, 
even  though  his  product  may  be  a  real  benefit  to  the 
department-store  stock.  Progressive  manufacturers 
and  wholesalers  are  taking  pains,  therefore,  to  learn 
the  department-store  angle,  and  to  act  accordingly. 

The  same  general  poHcy  holds  good,  investigation 
indicates,  for  manufacturers  in  dealing  with  chain 
stores.  Let  us  now  proceed  to  a  discussion  of  effective 
direct  selling  to  consumers. 

Getting  distribution — as  the  manufacturer  who  sells 
through  regular  jobbing  and  retail  channels  under- 
stands the  phrase — is  a  problem  almost  unknown  to 
manufacturers  who  dispose  of  their  products  direct  to 
consumers.  The  consumer,  of  course,  may  be  an 
individual  buying  an  article  of  food  or  clothing,  a 
railroad,  another  manufacturer,  or  a  construction  com- 
pany, yet  the  sale  is  none  the  less  distribution. 

Advertising  becomes  a  vitally  important  factor  in 
distribution  for  a  manufacturer  who  sells  direct  to 
consumers,  no  matter  into  which  class  of  consumer  his 
prospect  falls.  Advertising  is  clearly  the  right  hand  of 
the  manufacturer  who  plans  to  sell  by  mail  exclusively, 
and  it  has  proved  an  aid  to  reducing  selling  cost  for 
many  concerns  which  offer  their  products  to  other 
manufacturing  and  wholesaling  concerns. 

Selling  to  other  business  houses  may  well  receive 
special  study  on  the  part  of  manufacturers  who  have 
that  problem  to  solve,  and  the  more  involved  the  busi- 
ness of  the  prospective  customer,  the  more  complex 
the  problem  usually  becomes. 

Take  a  railroad  company  as  an  example. 

"Having  studied  the  railway  field  and  assured  him- 
self that  a  market  exists  for  his  product,"  says  a  manu- 
facturer trained  in  selHng  to  railroads,  and  basing  his 
advice  on  his  own  experience,  "a.  manufacturer  should 
determine  the  extent  to  which  his  product  can  be  used, 


GETTING  THE  RIGHT  PLAN  147 

exactly  why  it  should  be  given  preference,  and  who  the 
men  are  who  can  influence  its  purchase.  He  is  then 
ready  to  construct  a  selling  plan. 

"It  is  in  picking  the  men  on  whom  to  concentrate 
selling  effort  that  many  manufacturers  fall  down,"  he 
continues,  'frequently  a  salesman  is  assigned  the  job 
of  bringing  in  a  contract,  just  on  the  bare  hearsay 
that  some  road  is  in  the  market.  The  salesman  finds 
his  prospect  stretched  over  hundreds  or  thousands  of 
miles  of  track.  All  he  knows,  probably,  is  that  some- 
where is  a  purchasing  agent — perhaps  several  of  them. 
But  he  might  call  on  some  purchasing  agents  for  years 
and  not  get  an  order.  It  has  been  done.  On  the  other 
hand,  careful  study  of  the  field — railroad  or  other 
industry — will  indicate  what  men  to  call  on  and  how 
to  plan  the  selling  campaign.  In  this  way  the  manu- 
facturer will  speed  up  distribution,  eliminate  waste  of 
time,  and  cut  costs  all  along  the  line." 

Hard-driven  selling  effort  enabled  one  eastern  com- 
pany to  distribute  its  product  effectively,  and  to  create 
in  five  years  a  sales  volume  running  into  millions. 

Making,  as  it  did,  an  article  of  equipment  for  railroad 
cars,  this  concern's  possible  market  was  easily  deter- 
mined. Repeat  business  was  obviously  the  secret  of 
success.  Advertising  was  begun,  therefore,  even  before 
the  company  had  sold  a  single  order.  Mediums  were 
chosen  with  care  to  pick  only  those  reaching  railroad 
executives,  engineers,  firemen,  and  train  dispatchers. 
The  advertising  copy,  once  it  was  begun,  was  set  in 
generous  space,  and  was  of  the  educational  type.  Much 
credit  for  its  success  is  attributed  by  the  company  to 
its  advertising  copy,  but  its  executives  state  that 
preliminary  analysis  of  distribution  possibihties  indi- 
cated the  strongest  copy  appeals  and  enabled  them  to 
reach  the  right  men — the  vitally  important  factor. 
These  simple  methods  have  made  possible  a  distribu- 
tion covering  nearly  200  railroad  systems. 


148         MARKETING  PLANS  AND  POLICIES 

Whether  to  sell  direct  or  through  trade  channels 
brings  up  questions  of  a  different  type,  investigation 
indicates.  Often  a  manufacturer  of  a  staple  article, 
for  example,  hesitates  to  embark  upon  an  advertising 
campaign  which  will  bring  him  into  competition  with 
concerns  stronger  financially,  and  already  well  en- 
trenched among  jobbers  and  dealers.  What  is  more 
natural  than  that  he  should  consider  carefully  his 
prospective  profits  through  seUing  by  mail? 

THIS  MANUFACTURER  COULD  NOT  HOPE  TO  ADVERTISE 
INDIRECTLY  AND  WIN  OUT 

This  was  the  position  of  a  manufacturer  of  an  article 
of  men's  wear.  To  distribute  his  product  through  the 
trade  brought  him  into  direct  competition  with  large 
organizations  spending  millions  yearly  to  create  de- 
mand. He  probably  could  not  expect,  through  even 
larger  expenditures  than  his  competitors,  to  wrest  from 
them  an  equal  share  of  good  will  and  sales.  He  saw 
he  might  always  be  an  insignificant  trailer.  So  he 
turned  to  selling  by  mail  entirely. 

Ready-made  wearing  apparel,  he  reasoned,  had 
pushed  made-to-order  goods  to  a  point  where  they 
were  a  drop  in  the  ''total  sales  bucket."  And  many 
men  would  find  it  convenient  and  profitable  to  buy 
the  garment  he  manufactured  if  at  the  same  time  he 
could  offer  them  all  the  advantages  of  made-to-measure. 

That  he  has  continued  a  consistent  direct  advertiser 
for  years  argues  well  for  the  success  of  this  manu- 
facturer's plan.  His  business  has  grown  steadily  be- 
cause his  offer  does  appeal  to  busy  men  who  are 
fastidious  about  their  dress.  The  careful  building  up 
of  his  lists  and  the  conscientious  service  built  into  his 
goods,  bid  fair  to  make  his  success  a  permanent  one. 

One  important  phase  of  distribution  aheady  men- 
tioned has  to  do  with  the  breaking  down  of  trade 
barriers;    in  short,  many  distributors  are  celling  goods 


GETTING  THE  RIGHT  PLAN  149 

today  through  channels  which,  a  few  years  ago,  were 
closed  to  them.  For  some  distributors  this  problem  of 
finding  new  outlets  does  not  exist,  of  course.  But  for 
others,  a  close  study  of  distribution  channels  may 
reveal  new  sales  possibilities  undreamed  of  before,  with 
greater  profits  as  a  possible  result. 

A  furnitm-e-polish  manufacturer,  after  several  years 
of  effort  to  build  up  a  respectable  sales  volume  by 
selling  to  furniture  stores,  evolved  a  new  plan  of  dis- 
tribution. It  eliminated  furniture  stores,  so  far  as 
main  efforts  were  concerned.  Instead,  he  sold  his 
product  to  hardware,  drug,  grocery,  and  department 
stores,  and  sales  quadrupled  almost  immediately.  In 
each  town  he  went  to  he  sought  the  best  store  in  each 
of  these  four  lines,  and  advertised  for  several  months 
with  the  four  dealers'  names  at  the  bottom  of  each 
advertisement.  Analysis  of  sales  over  a  year's  period 
showed  sales  in  the  four  stores  in  one  city  averaging : 

Hardware  stores 50%  Department  stores 18% 

Drug  stores 22%  Grocery  stores 10% 

Another  somewhat  similar  experience  is  that  of  a 
concern  making  a  metal  product  of  widespread  house- 
hold consumption,  and  formerly  selling  almost  exclus- 
ively in  hardware  and  paint  stores.  The  product's 
label  called  attention  to  its  usefulness  in  housework,  and 
this  happened  to  catch  the  eye  of  an  obscure  clerk. 
''Housewives,"  he  reasoned,  ''visit  grocery  stores  half 
a  dozen  times  to  one  call  at  stores  in  other  lines."  At 
length  he  persuaded  the  manufacturer  to  approach  the 
grocery  trade,  and,  while  not  neglecting  the  established 
distribution,  to  advertise  the  household  feature  with 
the  phrase,  "For  sale  at  your  grocer's."  The  results 
were  astonishing.    Sales  boomed  at  once. 

Finding  new  outlets  may  well  work  benefits  to  a 
manufacturing  business  other  than  simply  stimulating 
sales,  it  was  found.    One  concern  noticed  an  appreciable 


150         MARKETING  PLANS  AND  POLICIES 

livening  up  among  its  salesmen  as  a  result  of  its  entering 
new  distribution  channels.  More  points  of  contact 
seemed  to  give  the  salesmen  new  insight  into  other 
lines  of  business,  and  broadened  their  points  of  view. 
The  druggist  welcomes  any  line  which  will  turn  quickly 
and  show  a  fair  profit.  Hardware  stores,  too,  are  adding 
lines  of  goods  which  no  one  ever  thought  of  a  few  years 
ago  as  hardware-store  possibihties. 

Recently  a  paint-and-varnish  manufacturer  clas- 
sified the  stores  in  which  his  products  were  sold,  and 
discovered  some  interesting  facts.  In  the  Southwest 
over  60%  of  his  retail  distributors  were  druggists;  in 
the  Middle  West,  50%  were  druggists;  but  on  the 
Pacific  Coast,  only  15%  were  druggists.  A  campaign 
was  started  to  get  druggists  in  the  West  Coast  states, 
and  in  a  short  time  drug-store  distribution  in  that 
territory  was  brought  to  the  level  of  other  sections. 

These  experiences  emphasize  the  importance  to  man- 
ufacturers of  learning  trade  tendencies  in  different 
sections  of  the  country,  and  picking  live  dealers  to 
handle  their  goods.  In  the  hght  of  the  trade  barriers 
broken  down  in  recent  years  it  appears  as  if  almost 
any  distribution  plan  is  possible  of  success,  for  not  so 
many  years  ago  sales  of  handkerchiefs  and  photo- 
graphic suppUes  in  drug  stores,  automobile  accessories 
in  hardware  stores,  and  phonographs  in  jewelry  or 
hardware  stores,  would  not  have  been  considered. 

With  the  results  of  his  investigation  before  him, 
and  having  determined  through  what  channels  he  may 
distribute  his  goods  most  profitably  a  manufacturer 
or  wholesale  dealer  may  now  consider  the  third  prin- 
cipal step — coordinating  the  various  factors  of  dis- 
tribution and  demand  creation  to  make  an  effective, 
unified  selling  effort  on  the  product. 

Making  two  supposedly  opposing  forces  work  to- 
gether has  proved  highly  profitable  for  a  manufacturer 
of  electrical  appUances.     If  anyone  suggested  to  you 


GETTING  THE  RIGHT  PLAN  151 

that  any  manufacturer  could  use  mail-order  adver- 
tising and  gain  the  good  will  of  retailers,  you  no  doubt 
would  call  the  suggestion  ridiculous,  yet  that  is  just 
what  the  electrical-goods  manufacturer  has  done. 
Progress  has  been  slow,  but  he  can  afford  to  go  slowly, 
for  he  has  a  successful  business  of  some  years'  standing, 
built  up  by  mail-order  advertising. 

RIDICULOUS,  YOU'LL  SAY  AT  FIRST  GLANCE,  BUT  THIS  PLAN 
WON  OUT  IN  SPITE  OF  ALL  AGAINST  IT 

The  question  came  to  his  mind  how  a  change  from 
selling  by  mail  to  selling  through  dealers  would  affect 
his  volume,  his  costs,  and  his  profits.  Several  strong 
competitors  were  cultivating  dealers  exclusively,  and 
were  progressing  faster,  he  believed,  than  he  was.  He 
decided,  therefore,  to  make  the  change. 

A  long,  hard  fight  to  overcome  dealers'  antagonism 
seemed  to  be  ahead,  yet  the  transition  was  accomplished 
with  very  Uttle  difficulty.  Mail-order  advertising 
turned  out  to  be  a  powerful  weapon  for  winning  dis- 
tribution and  active  dealer  cooperation.  After  the  new 
pohcy  was  decided  on,  every  inquiry  from  advertising 
was  turned  over  to  the  dealer  in  the  vicinity  from  which 
the  inquiry  came,  or  was  used  to  open  up  a  new  agency 
if  no  local  representation  existed. 

No  change  has  been  made,  therefore,  in  the  adver- 
tising. The  only  different  method  is  in  the  way 
inquiries  are  handled.  The  dealers  have  to  be  kept 
fully  informed  as  to  what  the  company  is  doing,  of 
course,  so  that  no  misunderstandings  will  arise.  The 
manufacturer  now  has  two  branch  offices  and  employs 
seven  salesmen.  This  sales  organization  has  developed 
from  nothing  to  meet  the  demands  of  the  trade. 

Simultaneous  use  of  retail  dealers  and  house-to-house 
canvassers  has  been  effectively  made  by  a  concern 
manufacturing  kitchen  utensils.  The  canvassers  are 
employed  to  overcome  the  difficulty  of  making  the  fii'st 


152        MARKETING  PLANS  AND  POLICIES 

sale  to  a  housewife.  In  order  that  sales  by  canvassers 
may  not  conflict  with  dealers'  sales,  canvassers  are 
supplied  with  special  products  which  have  not  yet  been 
offered  to  dealers.  This  does  away  with  illogical 
competition  and  creates  future  business  for  dealers. 

Two  distinct  selling  organizations  are  maintained  by 
a  company  manufactm*ing  an  infants'  food — one  to 
develop  trade  through  regular  jobber-and-dealer  chan- 
nels, and  the  other  a  force  of  "good  will"  represen- 
tatives, or  ''detail"  men  as  they  are  called,  who  call 
on  physicians.  The  "detail"  men,  many  of  whom  are 
graduate  physicians,  have  specified  territories,  and 
their  duty  is  to  visit  all  physicians  in  their  territories 
two  or  three  times  a  year,  give  service  of  any  sort  that 
they  can,  and  leave  samples  of  the  food. 

As  sampling  forms  an  important  part  of  this  com- 
pany's publicity,  the  "detail"  men  are  of  value  in 
handUng  the  sampling  activities  because  their  "close- 
ness" to  the  medical  profession  often  enables  them  to 
get  names  and  lists  more  readily  than  can  regular 
salesmen.  Birth  records  are  carefully  watched,  and 
samples  distributed  among  homes  where  there  are  new 
babies.  Backed  by  the  good  will  of  doctors  this  activity 
has  proved  widely  successful  in  all  territories. 

Nine  main  features  constitute  the  marketing  plan  of 
an  eastern  candy  concern — a  plan  especially  note- 
worthy for  the  effective  coordination  of  a  number  of 
different  factors,  and  because  every  one  of  the  nine 
methods  is  adaptable  to  other  lines  of  business.  The 
company  has  long  enjoyed  a  large  business  in  its  own 
city,  but  until  this  plan  was  put  into  operation,  it  had 
failed  to  expand  satisfactorily  beyond  its  immediate 
neighborhood.  Expensive  sales  campaigns  would  re- 
sult in  orders  from  dealers  and  jobbers  but  before 
long  back  would  come  a  lot  of  stale  goods  for  credit. 
The  new  plan,  however,  sold  the  candy  to  consumers, 
and  the  trade  fell  in  line  enthusiastically. 


GETTING  THE  RIGHT  PLAN  153 

The  first  of  the  nine  methods  was  outdoor  adver- 
tising. Locations  were  chosen  with  care,  to  reach  the 
right  class  of  prospective  customers.  At  first  street- 
car cards  appeared  simultaneously  with  the  bulletins. 
Later  the  two  types  of  advertising  were  alternated, 
used  simultaneously  again,  and  then  dropped. 

Educational  copy  started  in  newspapers  a  week  after 
the  outdoor  and  street-car  display.  Large  space  was 
used  at  first,  and  gradually  lessened  in  size  as  the 
campaign  developed  and  sales  picked  up. 

Window  displays  next  were  arranged  simultaneously 
in  the  best  windows  of  several  stores  in  one  section  of 
each  city.  The  displays  were  changed  after  three  days, 
the  new  display  left  in  for  three  days,  and  then  the 
window  campaign  was  moved  to  another  section  of 
the  city.  This  window  procedure  continued  until  the 
entire  city  was  covered  in  an  effective  way. 

With  each  display  went  a  high-class  woman  demon- 
strator— the  fifth  step  in  the  plan.  Her  task  was  to 
get  everybody  in  the  store  where  she  worked  enthu- 
siastic about  the  candy,  to  give  oat  samples, and  to  sell. 

With  the  corps  of  demonstrators  went  other  specially 
trained  women  who  arranged  for  bazaars,  church  fairs, 
and  similar  events,  and  sold  the  manufacturer's  goods, 
the  profits  going  to  the  churches  or  other  institutions 
back  of  the  affairs.  This  was  evening  work  largely, 
and  during  the  afternoons  these  women  arranged  with 
employees  of  offices  and  stores  to  act  as  agents  by 
selling  candies  to  other  workers  at  noons  or  after  hours. 

At  intervals  while  these  activities  were  going  on,  the 
man  in  charge  of  the  territory  called  on  jobbers  and 
retailers,  explained  the  various  steps  in  the  campaign, 
and  made  helpful  suggestions  to  them. 

In  some  towns  the  manufacturer's  goods  were  given 
as  prizes  in  contests  conducted  by  newspapers.  These 
contests  were,  of  course,  originated  by  the  manufac- 
turer's representatives. 


154         MARKETING  PLANS  AND  POLICIES 

Lastly,  in  suburban  and  country  districts  every 
available  wall  which  would  serve  for  a  sign  and  could 
be  rented,  was  painted  with  an  advertisement  of  the 
goods.  A  considerable  corps  was  kept  busy  at  this 
work  in  the  summer  months,  and  in  the  winter  they 
painted  awning  drops  for  use  by  dealers. 

This,  in  brief,  composes  the  nine  steps  in  the  candy 
manufacturer's  plan.  It  was  fully  developed  in  less 
than  one  year,  and  it  proved  so  successful  that  it  has 
been  in  operation,  with  minor  changes  to  meet  local 
conditions,  for  several  years.  So  intensive  was  the 
cultivation  of  consumer  demand  that  jobbers  and 
retailers  were  glad  to  stock  the  goods  and  to  push  them. 

THE  DETAILS  OF  THIS  TESTED  PLAN  ARE  IMMATERIAL; 
ITS  FUNDAMENTALS  YOU  CAN  USE  AT  ONCE 

Another  plan,  the  fundamentals  of  which  seem 
adaptable  to  many  kinds  of  business,  was  recently 
worked  out  by  a  manufacturer — he,  too,  makes  candy 
— and  the  details  are  handled  in  an  interesting  way. 
The  manufacturer  calls  his  dealers'  stores  "service 
stations,"  and  ships  to  them  parcel-post,  regulating 
dealers'  orders  by  their  unsold  stocks. 

That  is  the  ''meat"  of  his  plan,  and  its  advantages 
will  be  apparent  at  once.  Good  candies,  small  profit, 
quick  deliveries — that  sums  up  his  policy,  and  his 
plan  is  working  out  well  on  that  basis. 

Hand  in  hand  with  these  methods  go  the  manufac- 
turer's consistent  advertising — a  steady  stream  of 
direct  advertising  matter  sent  out  for  dealers.  His 
idea  is  to  make  weekly  buyers  of  his  dealers'  customers, 
so  letters  and  booklets  play  up  quality,  assured  fresh- 
ness, and  price.  The  good  will  thus  created  serves 
further  as  a  means  of  holding  dealers  in  line,  as  a 
threat  by  the  manufacturer  to  change  his  "service 
station"  usually  brings  the  troublesome  dealer  to  time, 
and  it  is  unnecessary  to  act  harshly. 


GETTING  THE  RIGHT  PLAN  155 

Often  a  manufacturer,  of  course,  has  to  "go  it 
blind"  to  a  certain  extent.  For  the  pioneer,  learning 
by  experience  is  about  the  only  method  of  answering 
certain  questions  of  detail.  The  basic  principles  can 
be  taken,  probably  from  plans  worked  out  successfully 
in  other  lines,  but  details  may  prove  troublesome. 

A  building-material  manufacturer  had  to  learn  by 
experience  when  he  began  marketing  a  new  product. 
His  first  thought  was  that  hardware  dealers  would  be 
his  logical  outlet,  and  that  consumers  would  them- 
selves do  the  ''putting  on."  He  himself  did  not  reahze 
the  many  possible  uses  for  his  product. 

A  campaign  of  small  advertisements  did  not  prove 
effective,  so,  although  he  felt  compelled  to  go  carefully, 
the  manufacturer  ran  a  full  page  of  educational  copy 
in  a  magazine  of  national  circulation.  Over  6,000 
inquiries  came  in.  An  explanatory  folder  mailed  to 
these  dealer  inquiries  brought  over  2,500  orders,  and 
the  correspondence  which  followed  suggested  numerous 
new  uses  for  the  product,  and  which  were  practical. 

Thus,  the  plan  grew  as  the  campaign  progressed. 
The  manufacturer  realized  more  and  more  that  every- 
body— consumers,  dealers,  and  himself — had  much  to 
learn  about  the  uses  of  the  new  product.  He  hired 
college  students  to  act  as  representatives  during  the 
summer.  They  interviewed  dealers  and  consumers, 
and  obtained  many  useful  ideas,  as  well  as  giving  many. 
Results  showed  that  still  more  education  in  the  use  of 
the  product  was  necessary,  and  led  to  the  establish- 
ment of  a  bureau  for  investigation  and  service.  The 
manufacturer,  through  this  bureau,  developed  co- 
operation with  dealers  and  their  customers  to  a  high 
degree  and  thus  was  sure,  in  most  instances,  that  his 
product  was  being  properly  used. 

That  abnormal  conditions  may  make  necessary  quick 
changes  in  a  marketing  plan  is  shown  by  the  experience 
of  a  concern  which  manufactures  a  food  staple.    For 


156         MARKETING  PLANS  AND  POLICIES 

years  this  company  has  employed  samphng  crews 
whose  duties  were  threefold.  Each  man  superintended 
the  distribution  of  samples  in  his  territory,  distributed 
window  displays  and  signs,  and  checked  up  on  retailers' 
stocks,  paying  dealers  for  such  spoiled  goods  as  he 
cleaned  out  and  destroyed  at  the  time. 

Suddenly,  however,  several  of  these  men  began 
writing  in  that  they  had  been  denied  sampling  privileges 
in  several  towns.  Rumor  had  connected  epidemics  of 
disease  with  inoculated  samples,  resulting  in  the  general 
prohibition  of  sample  distribution.  In  not  a  few  towns 
even  the  company's  dealers  were  made  targets.  Resi- 
dents were  warned  against  the  company's  samples 
even  though  the  regular  man  visiting  the  town  had 
been  going  there  for  a  number  of  years. 

Obviously,  a  new  plan  was  necessary,  and  the  com- 
pany turned  to  general  advertising.  Part  of  the 
sampling  crew  was  retained,  with  larger  individual 
territories,  to  continue  the  work  of  distributing  adver- 
tising matter  and  checking  up  on  retail  stocks.  But 
magazine  advertising  displaced  sampling. 

An  interesting  jobber  policy  now  is  in  use  by  this 
company.  There  are  only  two  or  three  men  employed 
to  call  on  jobbers,  and  their  work  is  largely  that  of 
building  good  will  and  cementing  friendly  relations. 
Orders  are  never  asked  for  by  these  men.  Instead,  the 
company  ships  each  jobber  a  monthly  quota,  because 
if  left  to  their  own  devices  many  jobbers  would  order 
large  quantities  and  a  high  ratio  of  spoiled  goods  result. 

Occasionally  the  careful  working  out  of  detail  proves 
the  key  to  distinctive  success — witness  the  growth  of 
a  company  manufacturing  a  food  staple,  which  con- 
ceived the  idea  of  marketing  in  packages  a  superior 
grade  of  its  product  sold  previously  in  bulk  only.  To 
illustrate  how  quickly  the  idea j  took  hold  among  the 
trade  and  consumer  alike,  a  carload  order  resulted 
from  a  $25  advertising  appropriation  in  a  small  western 


GETTING  THE  RIGHT  PLAN  157 

city.  A  salesman  visited  the  town,  played  up  the 
package  plan  and  the  advertising,  took  dealers'  orders 
on  the  strength  of  his  two  arguments,  and  with  these 
orders  in  hand  called  on  the  local  jobbers.  A  carload 
order  was  immediately  forthcoming. 

It  appears  then,  that  close  investigation  of  hundreds 
of  effective  plans  emphasizes  two  general  policies  as 
forming  the  real  basis,  it  may  fairly  be  said^  of  prac- 
tically every  permanently  successful  plan. 

The  first  of  these  general  policies — preliminary 
analysis  of  the  field — commends  itself  to  every  progres- 
sive business  man.  Careful  analysis  is  worth  while  in 
every  business,  large  or  small,  and  in  any  line.  Careful 
tests  and  analysis  of  distribution  methods  and  ways  of 
creating  demand  may  indicate  methods  and  policies  to 
be  discarded  or  avoided,  and  also  may  point  out  clearly 
the  line  of  least  resistance  in  distribution — the  line 
which  the  distributor  wants  to  follow. 

''Getting  the  other  fellow's  point  of  view"  is  the 
second  general  policy  fundamental  to  successful  market- 
ing plans.  You  want  the  jobber  or  the  dealer  to  do 
something  for  you — order  a  bill  of  your  goods,  advertise 
them,  or  push  them  actively.  If  you  know  or  can  find 
out  what  his  attitude  is,  and  can  match  up  your  want 
with  his,  obviously  your  chances  of  success  are  mul- 
tipUed.  "Men  cannot  cooperate  successfully  for  any 
purpose,"  says  one  business  man,  *4f  the  sole  bond 
between  them  is  selfish  interest,"  and,  by  temporarily 
relegating  to  the  background  their  own  immediate  self- 
interests  and  playing  up  those  of  jobbers,  dealers,  and 
consumers,  many  progressive  houses  have  built  up 
distributive  organizations  known  the  country  over  as 
more  than  ordinarily  successful. 


TOURING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbolize  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  Publica- 
tions are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  knew 
so  well  during  the  war. 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
of  the  A.  W.  SHAW  COMPANY 


SECTION  2 

How  to  Fix  Prices  and  Establish 
Profitable  Sales  Quotas 


HOW  TO  ESTABLISH  PROFITABLE  SALES  QUOTAS 

BY  stating  its  quotas  in  terms  of  points  rather 
,  than  in  dollars  or  quantities  of  goods,  and  by 
assigning  a  different  value  to  the  points  for 
each  class  of  goods,  one  concern  was  able  to  secure 
more  uniform  distribution  and  to  get  all  its  salesmen 
to  push  its  hardest  seller  at  all  times. 

This  company  makes  one  special  office  appliance 
and  a  number  of  office  supplies.  All  of  its  quotas  are 
established  on  the  basis  of  the  previous  year's  sales. 
For  example,  if  the  quota  the  previous  year  was  200 
points  in  a  certain  territory,  it  might  be  240  or  250 
points  for  the  next  year,  the  exact  amount  depending 
on  local  conditions  and  the  salesman's  ability. 

For  a  long  time  this  company  had  trouble  getting 
the  salesmen  to  push  the  sales  of  the  special  appliance 
because  it  was  far  easier  to  sell  supplies.  Under  the 
new  system,  however,  every  incentive  is  given  to  the 
salesmen  to  push  sales  of  new  machines.  Selling  a 
machine  counts  two  and  one-half  times  as  many 
points  as  an  order  of  supplies  for  the  same  amount, 
and  five  times  as  many  as  a  reorder  of  supphes  for 
that  amount.  Prizes,  however,  are  given  for  the 
greatest  dollar-volume  of  business,  as  well  as  for  the 
highest  number  of  points,  and  so  the  salesmen  make 
every  effort  to  land  orders  for  new  machines. 

Previous  sales  were  found  by  investigation  to  be  the 
commonest  basis  for  the  fixing  of  quotas.  Investiga- 
tion also  indicated   that   manufacturers   and   whole- 

61 

Copyright,  1921,  by 

A.  W.  SHAW  COMPANY 

M  a  part  of  the  Shaw  Selling  Series 


62  BOOSTING  THE  SALES  VOLUME 

salers  are  realizing  more  and  more  the  value  of  setting 
up  an  attainable  standard  for  their  salesmen  for  each 
year  or  month.  Some  concerns  have  estabhshed 
definite  sales  standards  to  work  to  and  offer  a  bonus 
to  the  salesman  who  exceeds  his  standard.  It  was 
found,  also,  that  haphazard  methods  of  estabhshing 
quotas  are  rapidly  disappearing.  Instead  of  merely 
adding  10%  to  last  year's  sales  figures  in  a  territory 
and  calling  that  a  quota  for  the  next  year,  the  sales 
manager  today  makes  a  careful  analysis  of  his  field 
to  determine  just  what  the  sales  possibilities  are,  and 
then  works  out  effective  methods  to  help  his  men  obtain 
the  required  amount  of  business. 

There  are,  then,  two  important  questions  for  the 
manufacturer  or  wholesaler  to  consider  in  establishing 
quotas.  First:  Upon  what  basis  shall  the  quotas  be 
established — previous  sales,  per  capita  of  population, 
number  of  retail  outlets,  or  what?  Second:  How 
shall  he  analyze  the  field  to  determine  whether  its 
full  possibilities  are  being  realized? 

In  establishing  quotas  on  the  basis  of  previous  sales 
one  concern  has  worked  out  a  system  which,  it  believes, 
is  a  more  accurate  method  than  is  generally  used. 
Quotas  are  set  in  June.  The  total  sales  for  the  pre- 
ceding five  months  are  analyzed  in  each  territory. 
Then  the  sales  for  the  previous  year  are  figured  and 
an  average  of  this  figure  with  the  amount  of  sales  for 
the  five  months  is  obtained.  This  average  is  taken 
as  the  standard  upon  which  to  establish  the  quota. 

About  10%  is  added  as  a  nominal  increase  for  the 
coming  year.  This  figure  is  not  hard  and  fast,  how- 
ever, for  in  each  territory  the  increase  or  decrease  of 
population,  the  type  of  the  industries,  and  the  buying 
power  of  the  population  affect  the  final  decision. 

Another  concern — one  which  manufactures  a  line 
of  men's  clothing — uses  a  common  figure  for  all  terri- 
tories   no    matter   what    the    local    conditions.     The 


PROFITABLE  SALES  QUOTAS       63 

average  of  net  sales  for  the  spring  and  the  fall  selling 
seasons  is  taken  as  a  basis  for  the  next  year's  quota. 
After  the  average  is  learned  the  company  adds 
whatever  percentage  of  increase  it  thinks  it  can  handle 
for  the  next  year.  This  percentage  is  added  uni- 
formly to  all  territories.  Advanced  in  favor  of  the 
plan  is  the  fact  that  the  company  always  has  been 
oversold  for  a  number  of  years. 

THE  SALESMAN  GETS  A  REPORT  EACH  WEEK  WHICH  HELPS 
TO  SPUR  HIM  TO  INCREASED  EFFORT 

"Each  week  w^e  send  the  salesman  a  report,"  said 
the  sales  manager,  "which  shows  him  just  how  much 
of  his  quota  he  has  sold  to  the  different  classes  of 
customers.  No  salesman  is  allowed  to  open  a  new 
account  without  the  consent  of  the  house,  and  consent 
is  not  given  if  it  is  apparent  he  is  going  to  make  his 
quota  without  the  new  business.  If  a  salesman  sells 
his  quota  on  one  class  of  business  he  is  advised  to 
stop  selling  that  line  and  concentrate  on  others. 
The  reason  for  this  policy  is  our  hmited  output." 

One  manufacturer  of  building  materials  sets  a  quota 
largely  based  upon  the  probable  amount  of  raw  ma- 
terial available  for  the  year.  In  other  words,  the 
capacity  of  the  plant  is  given  first  consideration  and 
then  the  amount  possible  to  make  is  apportioned  to 
the  different  territories  on  the  basis  of  previous  sales 
and  local  building  conditions. 

One  shoe  wholesaler  establishes  quotas  on  the  basis 
of  the  population  in  each  territory.  Careful  estimates 
are  made  of  the  probable  number  of  shoes  which  will 
be  sold  by  the  retailers  for  the  season  or  year.  Then 
the  strength  of  competition  is  considered  and  the 
proportion  of  the  total  business  which  the  company 
ought  to  get  is  estimated. 

"We  usually  exceed  the  quota  which  we  get  by 
this  method,"  said  the  sales  manager.     "In  any  case, 


34  BOOSTING  THE  SALES  VOLUME 

we  can  always  tell  whether  we  are  getting  our  share  of 
the  business  in  each  territory." 

A  concern  which  makes  a  specialty  selling  to  retail 
stores,  bases  its  quota  on  the  number  of  stores  in  the 
territory.  Each  territory  is  expected  to  produce  one 
point  a  month  for  every  30  stores.  A  point  is  equal 
to  S25  in  sales  to  any  line. 

This  company  divides  the  country  into  sales  agencies, 
each  in  charge  of  a  manager,  who  has  under  him 
district  sales  managers,  salesmen,  and  subsalesmen. 
Quotas  are  assigned  to  agencies  only  and  the  manager 
is  responsible  for  his  quota  being  reached.  Salesmen 
are  not,  as  a  rule,  assigned  definite  quotas,  but  the 
agency  manager  may  divide  up  his  quota  definitely 
among  the  salesmen,  if  he  so  desires. 

One  concern  has  tied  up  its  quota  plan  closely  to  its 
bonus  system.  Quotas  are  based  on  the  number  of 
prospects  in  the  territories.  This  concern  recently 
changed  its  system,  so  that  each  salesman  in  a  branch 
may  share  in  part  of  the  bonus  whether  he  makes  his 
quota  or  not,  and  the  plan  works  well. 

Under  the  old  system  no  branch  office  received  a 
bonus  unless  the  company  mark  as  a  whole  was  reached, 
and  no  branch  could  get  a  bonus  unless  each  sales- 
man in  that  branch  made  his  quota.  This  has  been 
changed,  as  it  did  not  seem  fair,  and  as  the  plan  is 
worked  now,  any  branch  office  which  makes  its  quota 
gets  a  bonus  on  the  road. 

The  bonus  to  a  branch  amounts  to  about  3%  of  its 
total  gross  sales.  Of  this  3%,  an  amount  equal  to  2% 
is  divided  pro  rata  among  all  the  men  in  the  branch, 
even  including  the  office  men,  who  usually  have  no 
sales  to  their  credit. 

The  plan  does  away  with  the  idea  of  putting  bonuses 
on  a  purely  selfish  basis.  The  men  cooperate  with  each 
other  and  work  hard  to  make  their  quota  so  they  may 
all  participate  in  the  general  bonus.     The  remaining 


PROFITABLE  SALES  QUOTAS  65 

1%  is  divided  among  the  salesmen  who  make  their 
individual  quotas,  thus  giving  each  salesman  an  added 
incentive  to  work  harder  on  the  road. 

Now,  turning  to  our  second  problem  involved  in  the 
fixing  of  sales  quotas  that  stimulate,  let  us  see  how 
wide-awake  concerns  analyze  the  field  to  determine 
just  what  quota  figure  is  the  fairest  to  both  the  sales- 
men and  the  house. 

In  one  concern  the  salesmen  largely  are  instrumental 
in  determining  this  amount.  Before  the  beginning  of 
the  new  year,  each  salesman  is  expected  to  make  a 
careful  sm-vey  of  his  territory  and  to  present  an  estimate 
of  the  business  he  believes  he  can  get,  together  with 
the  number  of  new  agents,  dealers,  and  other  accounts 
which  he  hopes  to  open  during  the  year. 

This  report  is  analyzed  by  the  district  and  depart- 
ment managers.  Competition  of  local  manufacturers, 
the  type  of  the  market,  past  sales,  and  so  forth,  are 
taken  into  consideration.  The  salesman  is  notified 
of  the  figure  he  is  expected  to  reach.  If  his  own  figure 
is  changed  he  is  told  the  reason  for  the  change. 

This  analysis  by  the  salesman  also  helps  him  in  his 
work,  because  it  compels  him  to  make  a  careful  study 
of  the  possibiHties  of  his  field.  In  this  way  he  finds 
many  prospects  which  probably  would  be  overlooked 
otherwise.  He  is  careful  about  his  analysis  because  he 
knows  it  will  be  carefully  checked  over.  By  allowing 
the  salesmen  to  be  heard  in  fixing  quotas  the  company 
gains  their  confidence  and  full  cooperation. 

In  analyzing  his  field  to  determine  just  what  quota 
is  fair  in  each  territory,  one  manufacturer  carefully 
reduces  the  population  to  a  class  which  can  be  expected 
to  buy  his  products.  He  is  compelled  to  make  this 
careful  analysis  because  his  means  of  distribution  is 
limited  and  he  cannot  afford  much  advertising. 

The  points  considered  in  making  his  territory 
analysis  are:    (1)  how  many  prospects  can  use  the 


66  BOOSTING  THE  SALES  VOLUME 

product;  (2)  how  many  can  afford  to  buy  it;  and, 
(3)  how  many  can  be  reached  profitably.  Underlying 
these  three  points  are  the  broad  questions  of  race  and 
nationality,  density  of  population,  wealth  of  com- 
munity, and  general  commercial  and  social  conditions. 
This  detailed  consideration  of  each  territory  enables 
the  manufacturer  to  determine  in  advance  just  about 
what  his  sales  should  be  in  that  field.  Thus,  he  can 
give  his  salesmen  a  definite  figure  to  work  to,  and  can 
determine  in  advance  just  how  much  he  must  spend 
on  sales  in  that  territory  for  the  year. 

WITH  A  TERRITORIAL  ANALYSIS  LIKE  THIS  ONE  ALL  THE 
BUSINESS  IS  DEFINITELY  KNOWiN  AND  LINED  UP 

One  tire  company  makes  a  very  careful  study  of 
each  territory  to  determine  not  only  how  much  busi- 
ness should  come  from  the  entire  territory,  but  also 
to  find  out  how  much  should  come  from  each  section. 

This  company  has  a  record  of  each  automobile 
owned  in  the  territory  and  therefore  can  determine  the 
approximate  consumption  of  tires  in  it.  By  keeping 
a  close  record  of  the  number  of  automobiles  in  each 
town  in  the  territory  it  has  an  accurate  basis  for 
estimating  just  what  its  share  of  business  should  be. 

Quotas  generally  are  established  by  counties  and 
the  salesmen  work  from  the  largest  town  in  the 
county.  Figures  35  and  36  show  how  the  quota  is 
divided  by  analysis  in  one  county.  The  quota  for  the 
season  for  the  county  is  700  tires,  as  you  see.  In  map 
Number  I  the  county  seat  and  six  smaller  towns  are 
shown,  and  the  quota  is  well  distributed.  The  sales- 
man in  this  instance  is  not  only  making  his  quota  for 
the  entire  territory,  but  he  is  getting  the  proper  share 
from  each  unit  of  the  whole. 

In  the  second  map  is  illustrated  a  condition  which 
existed  before  the  company  made  a  careful  study  of  this 
territory.     It  is  apparent  at  once  that  the  salesman 


)-salesmenS  quota 


Figure  35:  How  a  careful  analysis  of  the  territory  helps  to  equalize 
distribution  is  shown  here  and  in  Figure  36.  Map  1  shows  the  distri- 
bution of  a  tire  company's  product  in  a  county  after  such  an  analysis. 


700- SALESMEN'S   QUOTA 


Figure  36:  Map  2,  shown  here,  indicates  the  distribution  of  the  prod- 
uct before  the  analysis  was  made.  Before  the  analysis  was  made  the 
salesman  was  making  his  full  quota,  but  certain  towns  were  neglected. 

67 


Total  Business-  100  Cars  of  400  Tires  ©  $20.  orl8,000 


Figure  37:  Investigation  has  convinced  one  company  that  it  is  entitled 
to  one-third  of  the  possible  business.  The  proportion  in  A  is  considered 
equitable,  with  $8,000  possible  sales.     B  shows  that  something  is  wrong. 


Sales  Manager's  Quota  $3,250,000 


Spring  Season 
$1,250,000 


Accomplltlied 
Amoutrt  of  Quota 


Fall  Season 
$2,000,000 


trip  2nd  trip  3frftriti  athtrip  iBt  trip  2nd  trip  3rdg1p  4tfi_tTlp 


I  Accompllslied 

Amouirt  of  Quota 

Srd'wp 


'^37,  Coo 


'T7,Co 


^^l.H" 


Ord«rs  Orders 


ZU.I.r'O 


M?il       Hou 
UfJOT 


B 


Orders  Orders 


M^il  Hoi 

if.iwl 


D 


DO 


1I9,S¥C 

Hi  lie 

R^ad 


DD 


DD 


Ma>l 


Figure  38:  One  sales  manager  sets  quotas  for  the  spring  and  fall 
seasons  at  the  beginning  of  the  year  on  a  chart  like  this.  The  quotas 
for  each  trip  in  the  spring  are  given,  and  the  actual  sales  for  the  first  two. 

68 


PROFITABLE  SALES  QUOTAS  69 

spends  most  of  his  time  getting  business  in  the  largest 
town.  Probably  375  tires  is  more  than  the  company's 
share  of  the  business  in  the  town,  but  the  analysis 
indicates  that  the  outlying  towns  are  being  neglected. 
This  is  especially  true  of  the  towns  near  the  large  city 
in  the  next  county,  where  sales  apparently  are  less 
than  half  what  they  should  be. 

In  both  instances  the  salesman  was  making  his  full 
quota,  but  before  the  analj'sis  of  his  territory  was  made 
in  the  second  instance  he  was  not  getting  proper 
distribution  for  his  product.  This  company  holds  that 
equitable  distribution  is  exceedingly  important,  and 
in  setting  quotas  it  is  careful  to  set  a  mark  in  each 
town  which  will  give  the  company  its  fair  share  of  the 
possible  business  from  each  town. 

In  each  town  this  (Company  considers  it  should  have 
approximately  one  third  of  the  total  business,  for 
in  most  towns  it  has  only  two  large  competitors.  The 
diagram  in  Figure  37  shows  how  the  company  analyzes 
each  town  to  determine  the  amount  of  business  it 
should  have.  In  one  town,  for  instance,  there  are 
100  cars,  and,  consequently,  there  is  a  possible  market 
for  400  tires  in  a  season.  At  an  average  seUing  price 
of  $20  a  tire,  the  total  market  would  be  18,000.  There- 
fore, the  company  sets  its  quota  for  that  town  at  150 
tires,  or  $3,000.  If  the  salesman  sells  much  less,  the 
company  begins  to  inquire  what  is  wrong. 

Another  company  has  worked  out  a  somewhat 
similar  system  of  establishing  quotas  only  after  a 
careful  analysis  of  each  territoiy.  This  concern  also 
has  an  effective  system  of  sales  records  obtained  from 
salesmen's  reports  on  customers  and  prospects. 

''While  the  net  selhng  cost  has  decreased  with  us 
because  of  increased  volume,  this  does  not  mean  that 
it  is  growing  easier  to  sell,"  says  the  sales  manager  of 
the  company.  "I  am  confident  it  is  becoming  every 
year  more  and  more  necessary  to  dig  deep  beneath  the 


70  BOOSTING  THE  SALES  VOLUME 

surface  of  sales  territories.  At  one  time  we  purposely 
sent  our  salesmen  out  for  a  hasty  run  over  large 
territories.  They  were  able  merely  to  scratch  the 
surface.  This  method  of  selling,  indeed,  brought 
results  and  quick  profits,  but  in  the  long  run  it  did 
not  bring  the  kind  of  returns  we  wanted. 

"Intensive  methods' of  seUing  are  necessary  for  that. 
We  have  found  in  our  business  that  the  deeper  you  go 
into  a  sales  territory,  the  more  possibilities  you  find 
for  the  development  of  sales  on  a  lasting  basis. 

"Our  records  begin  with  the  salesman  himself. 
His  daily  report  sheet  is  made  out  with  a  great  deal 
of  care.  We  require  a  good  many  details.  On  the 
other  hand,  we  provide  a  report  sheet  which  enables 
him  to  report  these  details  in  short  time. 

"Every  dealer  in  the  country  who  can  handle  our 
goods  is  on  our  list.  Our  territories  are  so  arranged 
that  the  salesmen  will  call  on  every  one  of  these  dealers 
an  average  of  three  times  a  year.  Quotas  are  set  for 
every  territory.  We  go  even  further  than  that,  how- 
ever, and  get  separate  quotas  for  every  district,  state, 
county,  town,  and  dealer. 

"Our  quotas  are  based  on  population.  We  figiu-e 
how  much  of  our  goods  should  be  used  in  a  year  by 
each  group  of  100  people;  and  on  this  basis  we  figure 
out  what  the  total  consumption  of  the  county  is. 
Then  we  figure  the  percentage  of  this  consumption 
which  we  think  our  company  should  get.  Worked  out 
in  detail,  this  gives  us  the  amount  we  should  be  able 
to  sell  to  every  retailer  in  every  part  of  the  country." 

Here  is  how  another  concern  analyzes  its  field  to 
determine  the  right  quota  for  each  territory.  It  makes 
an  office  machine,  and  began  to  fix  quotas  about  10 
years  ago.  At  the  beginning  of  each  year  the  new 
quota  for  the  entire  sales  organization  is  determined 
upon  a  basis  of  past  sales,  business  conditions,  popula- 
tion, and  estimated  production  capacity  for  the  year. 


PROFITABLE  SALES  QUOTAS  71 

Then  this  quota  is  divided  among  the  different  sales 
units  of  the  organization  in  proper  proportion. 

Quotas  are  expressed  both  in  dollars  and  in  points. 
If,  for  example,  the  quota  for  this  company  for  the 
entire  year  is  $15,000,000,  or  600,000  points,  the  first 
step  is  to  distribute  these  points  among  the  company's 
agencies,  proportioning  them  by  months  and  according 
to  the  size  of  the  agency's  territory.  Then,  in  turn, 
the  points  are  distributed  to  each  subterritory. 

Distributing  the  quotas  by  months  does  not  mean 
that  the  points  are  divided  into  12  equal  parts,  be- 
cause the  company  has  found  that  it  is  easier  to  sell 
in  some  months  than  in  others.  For  example,  it  might 
be  that  8%  of  the  quota  would  be  scheduled  to  be 
sold  in  January,  7%  in  February,  10%  in  June,  7% 
in  July  and  August,  9%  in  November,  and  so  on. 

THE  QUOTA  PLAN  OF  THIS  CONCERN  IS  FAIR.  YOU'LL  AGREE, 
TO  BOTH  COMPANY  AND  SALESMEN 

In  establishing  quotas  the  company  aims  to  make  a 
steady  increase  from  year  to  year.  It  does  not  take 
temporary  conditions  into  consideration.  For  in- 
stance, if  there  were  unusually  heavy  sales  in  one 
territory  caused  by  an  abnormal  increase  in  business, 
the  quota  for  the  next  year  would  not  be  raised  to 
correspond,  but  would  be  fixed  so  it  could  be  reached 
under  normal  business  conditions. 

During  one  year  more  than  75%  of  the  company's 
branches  made  more  than  100%  of  their  quotas. 
Some  made  as  high  as  190%.  The  quota  is  not  re- 
garded as  the  maximum  to  be  obtained,  but  is  looked 
upon  as  a  figure  to  be  reached  as  early  as  possible. 

Territory  valuation  formerly  was  judged  on  a  basis 
of  population  only,  but  it  was  found  that  territories  of 
equal  population  in  different  parts  of  the  country 
would  almost  always  yield  different  amounts  of  busi- 
ness.   AccessibiHty  and  the  amount  of  general  business 


Record  of  Quota  and  Sales  by  Salesmen  and  Units 

Performance                \ 
(All  performance  figures  in  red^f 

Salesman 

C-cats'Va'je'S'-iits'Va'^efTctai   Coats  Va'.e  S-":=  Va'.T    ,  ::  = 

Harrison 

1 

Bolton 

1                     ■                    ^                      ■ 

Jones 

!           ' 

Wakefield 

1           ' 

Anderson 

i           ' 

Ughtfoot 

' 

Osbom 

1 

Figure  39:  To  enable  the  sales  manager  to  check  the  actual  perform- 
ance of  his  salesmen  with  their  quotas,  this  record  is  kept.  "Task"  or 
quota   figures  are  entered  in  black:     "performance"   figures  in  red- 


RECORD  OF  TOTAL  ORDER  BY  TRIPS 
Spring                                                       Fall 

1 

2          3          4 

Salesman  j     1         2         3        4 

Total 

1 

H  =  Tison    i 

5. -on 

Jr-es 

.'.;•  e-'  r  : 

1 
Anderson 

— .-  — 

! 

'                              i 

Fig^e  40:  TrJs  record  gives  salesmen's  total  orders  by  trips.  It  is 
expected  that  a  salesrr.an  will  make  four  trips  in  the  spring  and  fotir 
mcve  in  the  falL     Additional  colunms  can  be  added  without  difficulty. 


PROFITABLE  SALES  QUOTAS  73 

present  are  considered  in  making  the  territory  analysis. 
The  company  also  is  aided  in  estabHshing  its  quotas 
by  a  detailed  analysis  of  sales,  covering  the  entire 
period  of  the  company's  existence,  and  tabulated  to 
show  at  once  the  number  of  machines  sold,  the  type, 
the  number  of  sales  in  each  territory,  and  the  average 
selling  price  in  each  territory — gross  and  net. 

These  analytic  tables  show  the  total  sales  of  "all 
machines  in  each  territory,  and  the' sales  to  each 
different  line  of  trade  in  each  territory'.  For  example, 
the  sales  by  lines  are  classified  under  the  headings  of 
financial,  government,  pubhc  service,  manufacturers, 
wholesalers,  retailers,  and  general.  Under  each  of 
these  heads  is  shown  the  number  of  machines,  their 
average  selling  price,  and  the  percentage  of  gain  or 
loss  in  each  line  of  business. 

Foreign  sales  are  just  as  carefully  classified.  .^  Other 
tabulations  show  the  percentage  of  cash  to  time  sales 
in  each  territory,  the  salesmen's  total  points  gained, 
and  the  percentage  of  the  quota  sold  for  the  year. 

Some  models  of  machines  are,  of  course,  harder  to 
sell  than  others  and  so  the  quota  credit  on  the  different 
machines  varies.  Just  what  is  fair  on  each  fine  is 
shown  by  charts  gi\ang  previous  sales  on  each  type  of 
machine.  Its  system  enables  this  company  to  establish 
quotas  accurately,  and  to  keep  a  constant  record  of 
how  the  sales  in  each  territory  are  progressing.  Thus, 
sales  are  always  kept  up  to  the  mark. 

Another  sales  manager  for  a  manufacturing  concern 
carefully  analyzes  the  field  by  methods  sunilar  to 
those  just  described  and  then  sets  a  sales  quota  for 
himself  for  the  year.  His  concern  manufactures  a  line 
of  clothing  and  the  salesman  makes  two  trips  each 
season.  The  sales  manager  divides  his  quota  among 
the  salesmen  and  then  keeps  a  record  of  task  and 
accompUshment  on  charts  similar  to  those  in  Figures 
38,  39,  and  40. 


74  BOOSTING  THE  SALES  VOLUME 

Quotas  for  each  salesman  are  based  on  his  percentages 
of  total  sales  the  previous  year.  That  is,  the  total 
increase  desired  is  figured  from  the  previous  year's 
total  and  then  proportioned  among  the  salesmen.  If 
one  man's  sales  amounted  to  2%  of  the  total  sales  he 
would  be  expected  to  show  a  proportionate  increase. 

These,  then,  are  some  of  the  most  successful  methods 
used  by  manufacturers  to  analyze  the  field  carefully 
and  to  set  a  logical  mark  for  salesmen  to  reach.  And 
without  some  definite  goal  to  work  to  and  without 
some  means  of  arriving  at  a  proper  mark,  disaster 
often  yawns,  according  to  one  sales  manager. 

''I  believe  that  establishing  sales  quotas  on  the 
right  basis  is  going  to  be  an  increasingly  vital  factor  in 
sales  work,"  he  says.  ''It  will  be  a  factor — a  mighty 
important  factor — in  keeping  down  the  rising  cost  of 
getting  goods  to  the  customer — a  cost  which  today 
threatens  to  swamp  many  of  us,  and  which  must  be 
met  with  the  most  effective  methods  at  our  command." 


HOW  ABOUT  PRICES? 

WHAT  price  shall  we  charge?"  was  one  of  the 
first  questions  put   before   his   executives    by 
the  president  of  a  reorganized  company  which 
was  about  to  manufacture  an  automobile  accessory. 

Under  the  old  regime  the  product  had  sold  for  $5 — 
normal  price  if  figured  on  the  basis  of  cost  plus  a 
reasonable  average  profit.  Sales  had  not,  however, 
shown  encouraging  increases,  and  the  new  president — 
a  close  student  of  merchandising  and  of  the  "psy- 
chology of  the  buj^er" — believed  that  a  higher  price 
would  lead  prospective  users  to  place  a  higher  valua- 
tion on  the  product,  which,  being  a  patented  specialty, 
he  felt  justified  any  sane  price  that  would  show  sav- 
ings and  satisfaction  to  the  purchaser. 

Other  factors  which  favored  fixing  a  higher  price, 
the  president  reasoned,  were  (1)  the  product  was  new 
and  had  virtually  no  competition;  (2)  a  high  price 
would  attract  attention  by  startling  contrast  and  would 
allow  a  generous  margin  widening  markets;  and,  (3)  it 
filled  a  genuine  need,  long  felt  by  motorists. 

"Why  keep  a  high-grade  useful  article  buried  in  a 
mass  of  inferior  products,"  he  reasoned,  ''when  a  higher 
price  will  probably  sell  it  more  effectively  and  attract 
more  to  its  benefits.  Let's  fix  a  price  by  the  value  of 
this  article  to  the  motorist  rather  than  by  what  it 
costs  to  make  and  sell." 

Twenty  dollars  accordingly  was  chosen  as  a  logical 
price — a  radical  increase,  to  be  sure,  yet  results  proved 

172 


PRICE  POLICIES  THAT  WIN  173 

the  wisdom  of  the  change.  Within  a  few  years  the 
company  considered  it  a  poor  day  if  sales  did  not 
reach  3,000  units  when  at  the  old  price  of  $5  the 
record  for  one  month  was  2,000  units.  Furthermore, 
as  the  product  became  better  known,  its  usefulness  led 
to  revisions  of  automobile-insurance  regulations,  and 
savings  in  insurance  premiums  offset  for  the  motorist 
the  higher  price  which  was  charged. 

This  story  points  out  the  wisdom  of  careful  price 
analysis  of  a  product,  not  only  from  the  manufacturer's 
own  point  of  view  as  affected  by  manufacturing  and 
distributing  costs,  but  from  the  ultimate  user's  stand- 
point, of  "What  will  this  article  do  for  me?  How 
much  is  it  worth  to  me  or  my  business?" 

Business  history  probably  has  comparatively  few 
incidents  exactly  like  that  of  the  accessory  concern, 
for  few  concerns  can  be  pioneers.  Yet  many  expe- 
riences which  do  stand  out  from  the  common  run,  illus- 
trate the  importance  of  logical  pricing  as  a  factor  in 
getting  and  maintaining  effective  distribution. 

Investigation  in  connection  with  the  preparation  of 
this  book  among  manufacturers  in  practically  every 
division  of  industry,  brought  to  light  hundreds  of 
interesting  facts  involved  in  the  problem  of  prices. 
Price-setting  poHcies  and  plans,  methods  of  making 
price  changes,  the  relation  of  salesmen  to  prices,  the 
relation  of  advertising  to  prices,  price  as  a  factor  in 
distribution — on  all  of  these  phases  of  the  broad 
problem  of  prices,  manufacturers  in  all  parts  of  the 
country  gave  freely  of  their  methods  and  results. 

For  purpose  of  discussion,  price  poHcies  and  methods 
can  be  grouped  logically  and  conveniently  under  three 
divisions:  (1)  getting  prices  on  the  right  basis;  (2) 
adjusting  prices  to  meet  new  conditions;  and,  (3) 
standing  up  firmly  for  right  prices. 

"Since  monetary  profit  is  the  primary  purpose  in 
business  generally,"  says  a  recognized  business  author- 


174         MARKETING  PLANS  AND  POLICIES 

ity  who  is  also  a  manufacturer,  "the  price  problem 
seems  at  first  glance  to  be  a  comparatively  simple  one. 
It  would  appear  that  a  manufacturer  has  but  to  know 
what  it  costs  him  to  produce  his  goods,  then  to  add 
enough  to  allow  for  distribution  expense  and  profit, 
and  thus  to  fix  his  price.  The  problem  seldom  is 
worked  out  that  way,  however,  as  most  manufacturers 
know.  In  fact,  reverse  the  process  and  you  have  the 
method  usually  adopted." 

HERE  YOU  SEE  EXPLAINED  WHY  ONE  EXPERT  BELIEVES  THE 
ESTABLISHED  MARKET  PRICE  IS  IMPORTANT 

The  established  market  price  is  the  most  important 
factor,  is  this  expert's  view,  in  establishing  the  price 
of  a  product.  The  cost  of  raw  materials,  which  he 
calls  the  most  important  variable  in  manufacturing 
cost,  becomes  secondary  in  importance  to  the  economic 
factors  of  the  potential  supply  of  the  finished  goods  in 
the  market,  the  buying  and  distributive  capacities  of 
merchants,  and  the  ability  of  the  goods  to  meet 
competition  of  other  products  in  their  class. 

His  view  is  strongly  supported  by  a  study  of  prices 
recently  made,  showing  the  range  over  a  35-year  period, 
of  prices  of  three  well-known  brands  of  cotton  goods, 
and  of  raw  cotton.  A  comparison  of  these  prices  shows 
wide  divergence  at  times  when  close  parallels  might 
have  been  expected,  because  of  manufacturing  con- 
ditions— and  this  in  spite  of  standardization  of  prod- 
ucts and  processes  carried  further  perhaps  than  in  any 
other  industry.  Frequently,  prices  of  finished  goods 
went  up  even  while  raw-cotton  prices  were  slipping; 
and  just  as  frequently  cotton  goods  prices  showed 
steady  reductions  in  the  face  of  a  higher  raw-cotton 
market.  Clearly,  the  law  of  supply  and  demand — not 
of  raw  cotton  but  of  the  finished  goods — controlled. 

The  accessory  manufacturer  whose  price  experience 
was  described  at  the  beginning  of  this  section,   took 


PRICE  POLICIES  THAT  WIN  175 

advantage  of  the  law  of  supply  and  demand  in  fixing 
the  price  of  his  product.  He  controlled  the  supply — 
temporarily,  at  least — and  he  awakened  an  actual 
demand  from  what  had  long  been  a  potential  demand. 

That  conditions  were  extraordinarily  favorable  to 
him  at  the  time  is  unquestioned.  It  is  interesting  to 
note,  however,  that  the  later  appearance  of  several 
strong  competing  products  has  caused  no  change  of 
price.  New  manufacturers  in  his  field  have  fixed  their 
prices  by  adopting  the  estabUshed  market  price  as 
they  foimd  it.  This  may  be  accounted  for  in  part  by 
increased  manufacturing  costs  in  recent  years,  but  it 
also  probably  indicates  a  tendency  on  the  part  of  new 
entrants  into  any  field  to  avoid  price  competition. 

Roughly  speaking,  a  manufacturer  or  jobber  who 
has  competition  to  consider — and  very  few  have  not — 
has  three  price  policies  open  to  him:  (1)  he  may  sell 
below  the  market;  (2)  he  may  sell  at  the  market;  or, 
(3)  he  may  sell  above  the  market — all  with  the  estab- 
lished prices  of  similar  grades  of  products  as  a  basis. 

The  manufacturer  of  an  article  of  household  use 
made  a  careful  analysis  of  his  market,  preparatory  to 
an  advertising  campaign.  He  found  a  single,  strongly 
entrenched  product  selling  at  10  cents.  It  dominated 
the  trade  by  virtue  of  a  huge  advertising  appropriation. 
Several  other  similar  articles  sold  at  5  cents  and  had 
very  little  advertising  back  of  them.  The  5-cent 
brands — by-products  of  other  industries  for  the  most 
part — evidently  relied  for  demand  creation  upon  the 
lower  prices  and  a  more  liberal  profit  margin  for  the 
trade,  instead  of  upon  advertising. 

The  manufacturer  took  his  cue  from  these  facts. 
As  there  was  no  well-advertised  5-cent  brand,  he  would 
put  one  on  the  market.  He  had  as  good  a  product  as 
the  10-cent  brand,  he  beheved,  but  he  lacked  resources 
to  undertake  the  great  volume  of  advertising  which 
would  be  necessary  over  several  years  to  build  up  a 


176         MARKETING  PLANS  AND  POLICIES 

profitable  business  on  a  10-cent  basis.  By  advertising 
a  5-cent  article,  however,  he  felt  sure  he  could  seize 
the  bulk  of  the  business  in  the  5-cent  field. 

Results  showed  he  was  right.  Demand  grew  rapidly 
as  his  advertising  took  hold,  and  with  greater  volume 
came  decreased  manufacturing  cost.  SelUng  expense 
also  went  down  proportionately,  until  before  long  he 
was  able  to  offer  the  trade  inducements  just  as  attrac- 
tive as  those  held  out  by  unadvertised  5-cent  brands. 
He  now  dominates  the  5-cent  market,  just  as  the  manu- 
facturer of  the  10-cent  product  is  alone  in  his  field. 

Selling  below  the  market  is  a  popular  and  often  an 
effective  method  of  getting  distribution.  Jobbers  and 
retailers  expect  price  concessions  in  return  for  stocking 
and  pushing  goods,  and  if  this  trade  activity  is  backed 
by  concentrated  advertising,  a  satisfactory  initial  dis- 
tribution and  demand  usually  follows. 

Selling  below  the  market  was  the  method  of  a 
western  soap  concern  which  recently  branched  out 
into  new  markets.  Price  concessions  backed  by  a 
product  of  merit  won  the  cooperation  of  jobbers  and 
dealers,  and  a  strong  campaign  of  newspaper  adver- 
tising on  the  special  introductory  prices,  turned  the 
initial  stocks  quickly  enough  to  bring  reorders. 

The  chart  (Figure  53)  indicates  in  theory  how  a 
policy  of  selling  below  the  market  operates  in  bringing 
new  buyers  into  the  market.  Take  any  one  of  thou- 
sands of  staple  articles,  specialties,  or  semi-specialties — 
distributed  for  the  most  part  through  regular  trade 
channels — and  an  abihty  to  ''shade  the  price"  often 
swings  the  deal,  other  factors  being  equal. 

The  type  of  product  has,  of  course,  much  to  do 
with  the  success  or  failure  of  a  given  price  policy. 
Demand  for  one  product  may  be  steady,  whereas  an- 
other is  perhaps  subject  to  highly  elastic  demand.  The 
individual  manufacturer's  problem  is  to  weigh  the 
factors  of  supply  and  demand  before  fixing  his  price. 


SELLING  AT  THE  MARKET  MINUS 

^x 

\ 

ox  indicate!  a  scale  of  prices  for  the  product, 
OY  the  number  of  buyers,  and  LM  the  num- 
ber of  buyers  at  any  given  price.  Ifoa  repre- 
sents the  prevailing  market  price,  and  oc  the 
number  of  buyers  at  that  price,  it  it  apparent 
that  if  the  price  of  the  product  is  reduced  from 

s,^^                          oa  tooa',  new  consumers  (oc')  will  be  brought 

^S^                   into  the  market. 

a 
a» 

^'"^^^^b           ' 

l-^^^^H? — -        M 

0 

c        c'                   Y 

Reprinted  fro 
Publi 

m  "An  Approach  to  Buslnees  ProblemB." 
shed  by  Harvard  Lloiveraity  Press 

Figure  53:  This  chart  shows  graphically  the  operation  on  the  demand 
side  of  the  price  policy,  "selling  at  the  market  minus."  A  careful  analy- 
sis of  the  product  and  its  market  help  to  determine  the  right  price. 


SELLING  AT  THE  MARKET 

ox  is  a  scale  of  increasing  price,  OY  the  num- 

.      .     f                                   ber  of  buyers,  and  LM  the  number  of  buyers 
Y  L  L.                                       at  any  given  price.    The  established  market 

V  ^-^                                     price  is  represented  by  oa,  and  the  buyers  at 

N.    ^                                  that  price  by  oc.    By  increasing  the  demands 

N.      .^                           and  the  proportional  number  of  buyers  at  each 

\y^^*^                     price,  the  demand  curve  LM  will  be  replaced 

^v.  ^^              by  L'M',  and  at  the  price  oa,  more  buyers 

^s/'v  ^      (oc')  will  be  secured. 

a 

^"^b^.    h' 

^"-^^i^r«->                 M 

;      i — ^ M 

!           i 

0 

c        c                       Y 

KeDrint«d  from  "An  Appro»ch  to  Baslnxss  Problems.' 
Published  by  Harvard  University  Press 

Figure  54:  This  chart  attempts  to  show  graphically  the  effect  of  a 
stimulation  of  increased  demand  for  a  commodity  without  any  increase 
in  the  price  at  which  it  is  marketed.     Note  how  it  differs  from  Figure  53. 

177 


178         MARKETING  PLANS  AND  POLICIES 

Far  more  goods  probably  are  sold  on  a  par  with  the 
market  quotation  than  at  any  other  price.  The 
tendency,  according  to  investigation,  is  to  avoid  cut- 
throat competition.  Price  standards  are  fairly  well 
fixed,  and  unless  the  delivered  cost  of  goods  is  low  as 
compared  to  costs  of  competitors'  goods,  selling  below 
market  prices  usually  is  dangerous. 

Setting  prices  for  its  products  by  what  consumers 
are  accustomed  to  pay  is  the  poHcy  of  a  middle 
western  company  turning  out  a  line  of  staples.  Re- 
sults have  been  particularly  satisfactory,  for  the  prices 
allow  adequate  margins  to  the  trade,  and  a  larger 
volume  of  business  has  brought  about  a  paring  down 
of  production  cost  which  has  resulted  in  a  larger  profit. 
The  company  now  finds  itself  in  an  enviable  condition 
as  practically  every  factor  is  working  with  it — con- 
sumer demand,  trade  cooperation,  and  profit. 

DO  YOU  KNOW  WHICH  IS  BEST  FOR  YOU— TO  SELL  BELOW  THE 
MARKET,  AT  THE  MARKET,  OR  ABOVE  IT? 

Selhng  at  established  market  prices  was  a  distribu- 
tion policy  which  was  generally  accepted,  one  manu- 
facturer points  out,  in  the  period  when  production 
methods  were  being  perfected  and  standardized,  and 
in  the  marketing  of  staple  commodities  it  is  common 
practice  today.  Figure  54  illustrates  certain  basic 
tendencies  of  the  working  out  of  this  poHcy. 

Modern  merchandising  contains  many  examples  of 
selling  at  prices  above  the  market.  With  the  develop- 
ment of  consumer  psychology  as  a  business  study, 
manufacturers  are  beginning  to  pay  attention,  one 
authority  points  out,  to  what  economists  call  the 
"consumer  surplus,"  or  the  difference  between  the 
usual  price  of  an  article  and  what  the  consumers  would 
be  willing  to  pay  for  a  better  quality  of  the  same  article. 

Selling  above  the  market  nearly  always  involves 
putting  into  the  merchandise  new  features  or  addi- 


PRICE  POLICIES  THAT  WIN  179 

tional  quality  which  will  set  the  product  apart  from 
others  in  the  buyer's  mind.  "Obviously,"  says  the 
same  authority,  "selling  above  the  market  creates  a 
golden  opportunity  for  demand  creation  by  advertising. 
How  else  can  a  product's  distinguishing  features  be 
brought  to  the  attention  of  buyers?  Without  adver- 
tising, selling  above  the  market  appears  to  my  mind 
to  be  a  poUcy  of  doubtful  wisdom." 

Not  long  ago  a  clothing  manufacturer  was  swamped 
with  requests  from  his  salesmen  and  dealers  for  a 
cheaper  line — men's  suits  to  sell  at  $15 — to  meet 
dangerous  competition  at  that  price.  A  careful  can- 
vass of  the  situation  convinced  the  manufacturer  that 
neither  he  nor  any  other  manufacturer  could  turn  out 
a  suit  to  sell  at  $15  which  would  be  good  quality. 

He  refused,  therefore,  to  bring  out  a  $15  Une,  and 
began,  instead,  a  comprehensive  campaign  of  news- 
paper advertising,  featuring  $25  as  a  good  price  to  pay 
for  clothes  if  the  buyer  wanted  maximum  value. 

"Go  into  a  clothing  store,"  read  one  of  his  adver- 
tisements, "wdth  the  idea  of  spending  $25.  One  of 
our  suits  at  $25  represents  the  most  in  style,  tailoring, 
and  wearing  quality  that  you  can  find  anywhere. 

"You  may  decide,  after  seeing  various  suits,  to 
spend  more  than  $25,  if  you  want  more  style  and 
quaUty.  But  you  get  your  money's  worth,  no  matter 
what  the  price,  if  it's  one  of  our  suits." 

The  campaign  put  an  end  to  the  $15  talk.  A  ten- 
dency toward  sales  of  better  merchandise  was  notice- 
able, and  dealers  reported  unusually  hea^^  sales. 

Thus  far  we  have  dwelt  largely  on  goods  sold  to  the 
public  through  the  trade.  But  no  study  of  price 
policies  would  be  complete  without  a  word  as  to  prices 
of  manufactured  products  sold  almost  entirely  through 
bids,  for  it  is  roughly  estimated  that  sales  of  products 
through  this  channel  represents  a  far  greater  volume 
than  do  trade-marked  goods  sold  at  fixed  prices. 


180         MARKETING  PLANS  AND  POLICIES 

In  many  lines  of  business  it  is  possible  to  find  in 
selling  methods  relics  of  the  days  of  horse  trading.  If 
a  purchasing  agent  needs  materials  quickly,  he  will 
doubtless  have  to  pay  more  a  car  or  a  ton;  but  if  he 
can  afford  to  wait  and  the  seller  cannot,  the  purchaser 
probably  gets  the  goods  at  less  than  the  first  price. 

Yet  even  here  we  see  the  law  of  supply  and  demand 
in  operation,  despite  the  fact  that  it  is  narrowed  down 
to  a  single  transaction.  Bids  and  asked  prices  create 
"the  market,"  and  the  manufacturing  cost  is,  of  course, 
the  basis  of  the  ''asked"  price.  A  foundryman  prob- 
ably figures  on  a  bid  about  like  this:  cost  of  pig  iron, 
plus  cost  of  other  materials,  plus  labor  cost,  plus  over- 
head, plus  $5-a-ton  profit,  and  then  asks  a  price  to 
give  $7-a-ton  profit.  He  may  finally,  of  course,  have 
to  take  less  than  a  $5  profit.  A  foundryman  may,  for 
instance,  accept  an  offer  which  means  a  $3  loss  a  ton, 
because  that  loss  would  be  less  than  his  loss  if  his 
plant  lay  idle.  So  "trading"  days  are  not  yet  over 
and  all  conditions  must  be  carefully  considered. 

Let  us  take  up  the  second  division  we  mentioned — 
adjusting  prices  to  meet  new  conditions.  Investiga- 
tion indicates  that  handling  price  increases  is  one  of 
the  most  troublesome  phases  of  the  price  question. 
Scarcely  a  manufacturer  has  escaped  in  recent  years 
the  necessity  of  announcing  higher  prices,  and,  of 
course,  all  have  been  forced  to  adopt  methods  designed 
to  lessen  the  shock  to  their  customers. 

Because  of  the  unsteady  prices  of  raw  materials  a 
varnish-and-paint  concern  has  found  it  practically  im- 
possible to  quote  standard  prices  for  its  goods.  Not 
long  ago  one  manufacturer — the  paint  concern  sells 
largely  to  manufacturers — ordered  50  gallons  of  varnish 
and  was  quoted  a  price  of  $1.80  a  gallon.  Before  the 
order  could  be  filled  the  price  had  to  be  raised  to  $2.80 
and  by  the  time  a  reorder  came  in  the  price  had  jumped 
to  $3.80  a  gallon  and  was  still  going  up. 


PRICE  POLICIES  THAT  WIN  181 

A  new  product  was  made  up  of  cheaper  materials. 
It  would  do  about  the  same  work  as  the  $3.80  varnish, 
and  it  sold  at  $2.80.  This  cheaper  grade  then  was 
offered  as  a  substitute  for  the  higher  priced  varnish. 
Few  sales  were  made,  however,  the  principal  draw- 
back apparently  being  a  psychological  one.  Buyers 
expressed  appreciation  of  the  varnish  manufacturer's 
offer  but  preferred  the  higher  priced  product. 

ADVERTISING,  MANY  MANUFACTURERS  HAVE  FOUND,  IS  AN 
EXTREMELY  VALUABLE  AID  TO  GOOD-WILL  BUILDING 

Advertising  also  has  proved  a  powerful  aid  for  many 
manufacturers  in  maintaining  good  will  when  higher 
prices  have  become  necessary.  One  concern — it  man- 
ufactures a  popular  brand  of  overalls — advertised  its 
new  price,  not  as  a  new  price,  but  as  "'the"  price.  In 
a  lower  corner  of  the  space  was  the  brief  explanation 
that  prices  of  dyestuffs  and  cotton  were  sky-high,  and 
that  to  maintain  the  standard  quahty  of  the  goods  it 
was  necessary  to  raise  the  price  from  $1  to  $1.25,  and 
that  later  it  might  be  necessary  to  increase  this  price. 

''As  a  modern  merchant,"  read  one  trade-paper 
advertisement,  "regardful  of  the  kind  of  merchandise 
you  offer  your  customers,  you  know  how  unsatisfactory 
substitute  dyes  can  be;  you  know  how  miserably  they 
fade  out  when  washed  or  exposed  to  light — some 
garments  even  change  color  while  lying  on  your  shelves. 

"To  convince  you  that  'Wear- Well'  overalls  at  $1.25 
a  pair  are  absolutely  the  best-seUing  overalls  you  ever 
had  in  your  store,  we  will  send  you  a  trial  order  of  5 
or  10  dozen  and  guarantee  the  sale  of  very  garment. 

"We  have  the  goods — every  pair  guaranteed. 

''Now  that  you  cannot  afford  to  sell  any  good  over- 
alls for  less  than  $1.25,  why  not  give  your  trade  the 
best — the  '  Wear- Well '  overall  that  is  fully  guaranteed." 

A  special  appeal  also  was  made  through  the  mail. 
A  folder  was  sent  to  dealers,  bearing  in  blue  pencil : 


182         MARKETING  PLANS  AND  POLICIES 

"These  prices  v/ill  look  mighty  good  to  you  in  30 
days,  you  will  find." 

On  the  first  page  was  a  special  message  signed  by  the 
president  of  the  company,  and  headed:  "To  all  my 
friends  who  sell  'Wear- Well'  overalls."  He  told  his 
dealers  that  in  his  judgment  the  prices  were  low. 

Take  another  example. 

"Our  product  has  been  advertised  nationally  for 
years  at  a  standard  price,"  says  one  manufacturer. 
"It  probably  was  as  closely  associated  with  this  price 
in  the  mind  of  the  buying  pubHc  as  any  other  product 
on  the  market.  Our  difficulties,  therefore,  when  in- 
creased costs  made  it  necessary  to  raise  our  prices, 
seemed  about  as  great  as  any  concern  could  encounter. 

"We  had  Uttle  trouble  in  handhng  the  increased 
price  through  the  wholesale  selhng  end,  but  we  were 
up  against  it  on  the  retail  merchants.  We  worked  this 
by  caUing  upon  most  of  the  retail  merchants. 

"We  organized  price-changing  crews  for  each  ter- 
ritory; these  men  were  equipped  with  new  labels  and 
fixtures  and  they  went  to  the  retailers  with  the  sole 
object  of  seeing  that  the  new  prices  were  displayed. 

"Here  are  the  statistics  on  two  divisions  of  territory 
— the  first  in  the  Middle  West  and  the  second  in  the 
East.  In  the  first  diyision  the  crews  made  14,975  calls, 
changed  the  labels  on  197,615  boxes,  and  installed 
3,690  new  fixtures,  while  66  dealers  refused  to  permit 
any  changes  to  be  made.  In  the  second  division  the 
crews  made  20,925  calls,  changed  329,955  box  labels, 
installed  10,110  new  fixtures  and  were  refused  by  85 
dealers.  The  cost  per  visit  in  the  Middle  West  worked 
out  to  63  cents,  and  in  the  East  to  68  cents;  the  cost 
of  changing  a  label  in  the  West  was  4.7  cents  and  in 
the  East  4.3  cents,  our  figures  showed. 

"Many  of  the  dealers  rephed  to  the  announcements 
that  we  had  sent  out  to  them,  and  about  10%  of  the 
replies  contained  new  orders  for  an  average  of  about 


PRICE  POLICIES  THAT  WIN  183 

$17.  The  number  of  the  repHes  and  the  size  of  the 
orders  are  about  one  half  of  our  usual  average,  from 
which  I  deduce  that  a  raising  of  prices  cannot  stop 
with  mere  notification  to  the  dealer.  Had  we  stopped 
with  the  dealer  I  think  that  our  business  would  have 
declined.  Outside  advertising  to  the  pubhc  seems 
necessary  if  a  concern  is  to  maintain  its  regular  volume. 

"Once  the  dealers  had  been  fixed  up,  the  adver- 
tising campaign  began  in  full  force  and  its  results  were 
immediate.  In  the  first  month  our  business  increased 
50% — and  nearly  all  on  the  models  that  had  been 
marked  up.  Orders  from  the  trade — soHcited  and 
otherwise — showed  a  steady  increase  and  in  October, 
six  months  later,  notwithstanding  greatly  increased 
production,  we  were  compelled  to  start  dechning  orders 
on  these  models,  as  the  factory  was  sold  out.  And, 
of  course,  the  dealers  who  had  resented  the  price 
changes  soon  forgot  about  them  in  the  new  business. 

"  'Raising  the  price  of  a  standard-price  article  is  one 
of  the  hardest  problems  that  a  manufacturer  can  go 
up  against,' "  says  a  manufacturer  who  is  one  of  the 
country's  heaviest  advertisers.  'Tor  years  he  has 
been  advertising  the  price  as  much  as  the  article;  he 
has  tried  to  make  the  article  and  the  price  synonymous 
in  the  pubhc  mind;  and  he  has  diligently  followed  up 
every  report  of  his  goods  being  sold  at  more  or  less 
than  the  advertised  price.  Having  estabhshed  this 
standard  price  everywhere,  having  brought  the  pubhc 
and  the  dealer  to  the  thought  that  the  price  is  a  thing 
inviolate,  suddenly  the  manufacturer  is  confronted 
by  soaring  factory  costs  which  make  a  profit  at  the  old 
price  impossible.  What  is  he  going  to  do?  That  out- 
lines exactly  the  problem  we  had  to  solve  not  long  ago. 

"Where  prices  vary  from  day  to  day  as  they  do  in 
many  lines  a  jump  in  price  means  only  another  quota- 
tion and  is  a  matter  of  no  moment.  But  we  had  been 
hammering  '  standard  price '  ever  since  we  went  into 


184         MARKETING  PLANS  AND  POLICIES 

business.  Nearly  a  hundred  thousand  dealers  v/ere 
displaying  fixtures  showing  the  prices  of  our  goods  and 
every  box  carried  the  price  in  plain  figures.  Adver- 
tisements, every  one  featuring  the  price,  were  scattered 
from  coast  to  coast  and  from  border  to  border,  and 
there  were  more  than  a  hundred  varieties  of  adver- 
tising. Our  goods  carried  a  guarantee  and  an  exchange 
value;  we  were  holding  hundreds  of  orders  for  future 
delivery  at  a  definite  price.  Everything  that  we 
owned,  it  seemed,  was  price-marked. 

THE  SALES  AND  PRICE  PROBLEM  HERE  WAS  INTRICATE,  BUT 
NOT  IMPOSSIBLE  OF  SOLUTION,  AS  WAS  PROVED 

*'If  a  manufacturer  has  to  consider  only  the  larger 
dealer  and  the  public,  the  puzzle  may  be  somewhat 
simpler  of  solution,  but  we  had  also  speciaHzed  on 
small  dealers  who  bought  direct.  We  had  a  bewildering 
number  of  units  with  which  to  deal,  I  cannot  think 
of  any  manufacturer  with  more  angles  to  his  price 
raising  than  we  had.  Nevertheless,  we  not  only  raised 
prices  but  we  also  increased  business  at  the  same  time. 

"Since  our  first  price  raise  to  the  public,  we  have 
made  several  other  increases  in  wholesale  prices  in  an 
effort  to  keep  pace  with  jumping  costs.  We  have 
learned  a  good  deal  about  price  raising,  almost  as 
much  as  we  had  learned  previously  about  price  stand- 
ardizing. We  have  learned,  at  some  cost,  that  it  is 
impossible  under  certain  trade  conditions  to  keep  your 
own  prices  definitely  fixed.  You  cannot  take  an  order 
now,  for  delivery  four  months  hence,  at  other  than 
the  market  price  at  the  time  of  delivery;  to  agree  to 
deliver  at  a  certain  price  is  merely  to  gamble  with  the 
chances  that  the  market  will  be  against  you. 

"To  go  back  to  the  price  raising.  It  would  have 
been  only  a  question  of  detail  to  mark  up  prices  with  a 
'take  it  or  leave  it'  air;  then  we  could  have  sat  back 
and   probably   watched   om*   business   dwindle.     We 


PRICE  POLICIES  THAT  WIN  185 

wanted  to  raise  prices  and  at  the  same  time  keep  every- 
one happy;  to  keep  the  dealers  happy,  they  must  sell 
more  goods  than  before  and  thus  make  more  money; 
to  keep  the  public  happy  we  had  to  be  sure  that  the 
buyer  felt  that  he  was  getting  his  money's  worth 
regardless  of  the  price  he  paid. 

"We  quickly  decided  that  the  price  the  dealer 
received  would  have  to  be  increased — that  as  the  goods 
were  worth  more  all  around,  the  public  should  pay 
more.  But  would  it  not  be  harder  for  the  dealers  to 
sell  at  higher  prices?  Probably  it  would.  We  decided, 
therefore,  to  give  the  dealer  a  higher  percentage  of 
profit,  and  to  increase  our  advertising  in  order  to  make 
it  easier  for  him  to  obtain  the  advanced  prices.  The 
dealer  must  be  protected — we  must  get  behind  him 
v/ith  all  kinds  of  support  of  the  right  sort. 

"The  price  was  raised  on  four  articles  at  the  be- 
ginning— these  were  well  known,  but  not  so  well  known 
as  our  leader.  We  decided  that  we  could  not  increase 
the  price  on  that  leader,  although  the  rising  costs  had 
taken  all  the  profit  out  of  the  sale.  Within  a  very  few 
months  we  were  temporarily  forced  to  take  it  off  the 
market  entirely.  A  year  later  we  were  able  to  accept 
orders  for  it,  but  it  is  now  as  ^special  price,  $1.40.' 

"We  determined  to  inaugurate  the  biggest  adver- 
tising campaign  that  we  had  ever  undertaken  and 
direct  it  to  the  goods  that  had  increased  in  price,  but 
without  mentioning  in  the  advertisements  that  there 
had  been  any  increase  in  price. 

"We  felt  that  without  extra  advertising,  sales  might 
slump,  and  if  that  happened,  making  it  necessary  to 
cut  down  production,  unit  costs  would  shoot  still 
higher,  with  proportionate  increase  to  the  pubUc. 
Advertising  helped  to  keep  the  prices  down.  But  the 
increase  in  price  was  a  problem  for  the  dealer  alone 
if  we  could  induce  the  public  to  buy  regardless  of  price; 
in  other  words,  we  aimed  to  center  attention  on  the 


186         MARKETING  PLANS  AND  POLICIES 

higher  class  and  higher  price  goods.  This  does  not, 
of  course,  mean  that  we  were  not  entirely  frank  about 
the  raise — but  we  felt  that  policy  dictated  an  emphasis 
on  quality  and  service  rather  than  price. 

"First,  we  prepared  and  placed  our  advertising, 
arranging  for  its  start  after  we  had  notified  the  dealers. 
We  divided  this  advertising  into  15  sections;  first 
came  the  general  advertising  in  newspapers  and  other 
publications  which  would  reach  the  people  as  a  whole. 
In  these  we  advertised  the  whole  line  in  what  I  think 
are  the  best  advertisements  that  we  ever  put  out.  The 
other  14  classes  of  advertising  were  arranged  to  appeal 
to  particular  divisions  of  prospects. 

"For  instance,  in  the  medical  journals  we  set  out  the 
merits  of  goods  peculiarly  suited  to  the  needs  of 
doctors,  and  so  on  through  all  the  various  classes  such 
as  farmers,  the  foreign-speaking  population,  boys  and 
girls,  and  stage  folk.  We  prepared  for  one  big  general 
drive  and  for  many  special-class  drives. 

"While  preparing  the  advertising  we  also  made 
ready  new  price  labels  for  all  the  boxes  in  stock  or  in 
the  hands  of  dealers.  We  renewed  all  our  outdoor  and 
street-car  signs  and  made  up  a  new  catalog.  Having 
attended  to  all  of  this  infinite  detail  we  were  ready  to 
put  the  new  prices  into  effect.  During  this  'make 
ready'  period,  saving  time  was,  of  course,  a  great 
object,  and  for  a  good  share  of  a  week,  part  of  the 
ofl&ce  force  and  half  a  dozen  printing  establishments 
worked  day  and  night.  But  when  we  started  the 
campaign  we  were  ready  in  every  particular. 

"We  sent  the  announcement  of  the  new  prices 
broadcast  to  the  dealers  by  an  illustrated  circular,  with 
which  we  enclosed  a  post-card  with  blank  spaces  for 
the  dealer  to  tell  how  many  and  what  sort  of  new 
labels  he  wanted  for  his  fixtures  and  stock. 

"In  the  circular  we  told  the  dealer  just  why  prices 
were  raised — the  increased  cost  of  metals  and  of  all 


PRICE  POLICIES  THAT  WIN  187 

the  materials  which  went  toward  the  making  of  the 
goods,  the  high  price  of  labor  and  the  necessity  of 
meeting  the  competition  of  the  fancy  wages  of  other 
plants.  We  told  them  of  the  advertising  campaign 
which  we  were  about  to  undertake  and  asked  them  to 
cooperate  with  us  to  their  own  advantage.  We  pointed 
out  that  they  were  entitled  to  the  additional  price  on 
goods  which  they  had  bought  at  the  old  prices,  be- 
cause in  times  hke  these  with  costs  varying  constantly, 
it  is  impossible  to  protect  the  trade  against  a  decline 
in  prices  later.  We  told  them  that  their  compensation 
for  a  decline  in  the  future  would  be  in  getting  the 
additional  price  at  the  present  time. 

"Last  of  all,  but  not  least,  we  warned  against  over- 
buying and  taking  undue  risks,  quoting  Judge  Gary's 
article  in  System  on  the  necessity  of  careful  buying 
in  order  to  avoid  reaction.  In  other  words,  we  tried 
to  help  them  as  we  would  have  wanted  to  be  helped 
in  similar  circumstances.     This  practice  pays. 

THE  RETAILERS  WERE  SUPPLIED  WITH  A  FULL  AND  EFFECPIVE 
COURSE  OF  SALES  PROCEDURE 

"While  notifying  the  retailers  we  brought  our  own 
salesmen  together  and  gave  them  full  instructions  and 
provided  them  with  new  price-lists,  new  samples, 
photographs  of  advertising  signs  and  fixtures,  and 
labels  for  changing  boxes,  and  the  like. 

"For  a  seUing  talk  we  told  them  to  concentrate  on 
advertising  and  forget  that  there  had  been  a  raise  in 
prices.  Of  course,  if  they  could  not  avoid  a  discussion 
of  the  subject  they  had  a  good  explanation  ready  to 
give  the  dealer,  but  we  felt  sure  that  it  was  best  for  all 
concerned  to  devote  ourselves  to  talking  such  positives 
as  general  prosperity,  rather  than  to  emphasize  a 
negative  point.  This  line  of  reasoning  was  our  manner 
of  advertising  to  the  public — putting  the  emphasis  on 
other  points  than  higher  prices. 


188        MARKETING  PLANS  AND  POLICIES 

*'We  followed  the  same  procedure  with  the  jobbers 
and  their  salesmen  and  gave  them  a  new  price-list  and 
all  other  needed  paraphernalia.  No  difficulty  arose  in 
deaHng  with  either  our  own  salesmen  or  dealers." 

That  lowering  prices,  when  such  a  change  is  possible 
in  normal  times,  may  also  present  difficulties  is  proved 
by  the  experience  of  an  automobile  manufacturer.  His 
advertising  had  pictured  to  prospective  buyers  many 
of  the  joys  of  motoring,  particularly  in  the  country. 
Sales  grew  normally  each  year,  with  prices  unchanged. 

Mechanical  improvements  in  one  year's  new  models 
— the  ehmination  of  parts,  and  marked  reductions  in 
manufacturing  costs — enabled  the  maker  to  announce 
a  list  of  prices  considerably  lower  than  prices  of  previous 
years.  Advertising  illustrations  continued  to  suggest 
the  joj^s  of  country  roads  while  copy  featured  the 
lower  prices  on  the  several  models. 

A  flood  of  inquiries  began  to  come  in  immediately 
after  the  first  magazine  advertisements  appeared.  Car 
owners,  dealers,  and  prospects  demanded  assurance 
that  the  new  prices  were  not  due  to  cheaper  materials. 

Advertising  copy  was  hastily  revised  and  new  illus- 
trations pointed  out  the  various  mechanical  changes 
which  made  lower  prices  possible.  Many  sales  were 
lost,  however,  because  the  manufacturer  failed  to 
grasp  in  t^me  the  fact  that  his  former  prices  were  the 
accepted  measure  of  the  value  of  his  products. 

So  much  for  handling  price  increases  and  reductions. 
Standing  up  for  fair  prices,  or  seeing  to  it  that  sales- 
men stick  to  price  schedules — our  third  and  last  divi- 
sion— also  presents  an  important  problem. 

Within  a  year  after  installing  a  profit-and-loss  de- 
partment an  eastern  manufacturer,  who  makes  a 
number  of  articles,  stopped  the  leaks  which  were  caused 
by  incorrect  quotation  of  prices,  and  enabled  his  sales 
manager  as  well  as  salesmen  to  tell  at  a  glance  the 
exact  profit  on  every  article  sold.    The  cost  of  main- 


PRICE  POLICIES  THAT  WIN  189 

taining  this  department  is  S5,000  a  year,  but  this 
expenditure  is  declared  to  be  insignificant  compared 
to  the  benefit  that  has  followed  its  definite  analysis  of 
the  manufacturer's  profit  and  loss. 

Roughly  outlined,  the  profit-and-loss  department 
works  as  follows.  When  an  order  comes  in  it  goes  to 
the  billing  department,  where  a  bill  is  made  out  and 
sent  to  the  profit-and-loss  department.  The  inventory 
costs  of  all  articles  manufactured  have  been  type- 
written on  sheets  of  paper,  and  these  sheets  are  tacked 
on  frames  attached  to  a  table.  The  clerk  in  checking 
up  an  order  can  glance  at  the  list  of  inventory  costs 
and  quickly  determine  the  profits.  If  an  incorrect  price 
is  quoted  she  notifies  the  billing  department,  which 
in  turn  reports  the  error  to  the  sales  department. 

To  simplify  the  determination  of  profits,  and  also 
the  marking  of  goods  in  stock  the  following  key  table 
is  used: 

_  Profit  Profit 

Division  1 less  than  10%  Division  5 18%  to  20% 

Division  2. .  .  .  10%  to  12^%  Division  6 20%  to  25% 

Division  3. . . .  12}^%  to  15%  Division  7 25%  to  30% 

Division  4 15%  to  18%  Division  8. . . .  more  than  20% 

Let  us  suppose  that  a  salesman  sends  in  an  order  for 
a  gross  of  a  certain  article.  A  bill  is  made  out  and  comes 
to  the  profit-and-loss  department  for  checking.  The 
clerk  who  gets  this  bill  finds  on  the  sheet  that  the 
inventory  cost  of  the  goods  is  $6  a  gross  and  it  is 
marked  up  to  sell  for  $8  a  gross.  The  goods  belong 
in  Division  6.  If  the  billing  department  made  a  mis- 
take, or  a  salesman  cut  the  price,  and  the  bill  is  made 
out  for  $6.75  or  $7  or  $7.50,  the  error  is  noted  and  the 
bill  sent  back  for  correction  at  once. 

Every  salesman  knows  that  the  house  is  checking 
the  way  he  is  standing  up  for  profits  and  the  system 
helps  him  further  in  pointing  out  which  lines  he  ought 
to  give  more  attention  and  time. 


190         MARKETING  PLANS  AND  POLICIES 

"One  of  our  greatest  problems,"  says  the  sales  man- 
ager of  this  concern,  "is  to  make  our  men  understand 
that  they  must  stick  to  the  prices,  and  know  prices 
well  enough  to  stick  to  them.  Frequently  a  salesman 
is  told  by  buyers  that  goods  can  be  bought  cheaper 
from  other  houses.  Nine  times  out  of  ten  it's  a  bluff, 
and  when  the  salesman  doesn't  know  his  business  the 
bluff  probably  works.  Not  long  ago  a  merchant  talked 
one  of  our  men  into  shading  prices  on  a  big  order. 
When  he  came  in  I  showed  him  an  order  from  a  much 
larger  estabUshment,  and  pointed  out  that  the  price 
he  had  quoted  was  5%  under  that  paid  by  the  larger 
store.  I  told  him  we  could  not  pass  the  order,  that  he 
would  have  to  stand  the  loss  himself  or  else  adjust 
the  prices.  He  grumbled,  and  prophesied  a  loss  of 
business  from  the  merchant  in  question,  but  we  stood 
pat.  As  a  matter-  of  fact  he  had  little  trouble  in 
straightening  the  situation  out,  our  business  with  that 
store  has  increased,  and  we  cured  our  salesman. 

"We  issue  weekly  price  bulletins  so  the  men  are  kept 
informed  on  price  changes.  We  require  that  they 
acknowledge  receipt  of  the  bulletins,  and  if  a  man 
doesn't  report  within  a  reasonable  length  of  time  that 
he  has  received  his  bulletin,  we  jack  him  up  on  it." 

Holding  to  prices  may  not  always  be  possible  or 
advisable  in  some  concerns — for  example,  those  in 
which  goods  are  sold  largely  by  "bid."  For  the  most 
part  the  "one-price  pohcy"  holds  good,  however,  as  is 
demonstrated  by  the  experience  of  one  of  the  largest 
corporations  in  the  country.  This  concern  has  given 
up  its  practice  of  protecting  its  heaviest  buyers  by 
giving  them  a  price  preference,  because  it  found  75% 
of  the  product  on  hand  just  prior  to  an  advance, 
usually  was  sold  to  these  "protected"  customers,  while 
the  other  25%  went  to  smaller  users  at  the  higher  prices. 
This  custom,  of  course,  made  it  necessary  to  pile  up 
great  stocks,  for  the  big  buyers  would  order  in  quantities 


PRICE  POLICIES  THAT  WIN  191 

when  the  word  came  that  an  advance  in  the  price  of 
the  product  was  imminent. 

Under  the  new  poHcy  of  the  same  price  to  all,  the 
company  needs  to  carry  much  less  stock  than  formerly. 
A  smaller  stock  means  that  less  money  is  tied  up,  and 
there  is  a  consequent  saving  of  interest.  Not  only  is 
the  financial  condition  of  the  company  strengthened 
by  the  new  policy,  but  the  smaller  stock  carried  means 
greatly  decreased  insurance  costs,  and  the  equal  treat- 
ment accorded  customers  promotes  a  better  feeling 
throughout  the  entire  trade. 

To  sum  up  briefly,  it  is  clear  that  usually  no  single- 
price  policy  can  be  applied  to  every  business.  But 
investigation  demonstrates  that  getting  the  "other 
fellow's"  viewpoint  nearly  always  will  suggest  a  satis- 
factory solution  of  the  price  problem,  just  as  it  often 
does  to  other  phases  of  the  manufacturer's  and  jobber's 
contact  with  dealers,  and  ultimate  consumers. 


"P\URING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbohze  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  Publica- 
tions are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  knew 
so  well  during  the  war. 


?•■-■■■' 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
of  the  A.  W.  SHAW  COMPANY 


SECTION  3 
Cutting  Salesmen  Who  Make  Good 


GETTING  THE  RIGHT  SALESMEN 

FIVE  sales  managers  in  five  different  concerns 
scored  a  hit  seven  times  out  of  eight  in  the  selec- 
tion of  salesmen  in  one  year.  For  two  years 
previous  the  best  any  one  had  been  able  to  do  was  to 
pick  four  successful  men  out  of  eleven  applicants. 
This  record  was  made  with  less  work  than  usual. 

This  high  average  also  was  made  in  a  year  when 
salesmen  were  hard  to  get.  Furthermore,  in  no  instance 
did  the  sales  managers  interview  many  men  and  no 
special  ability  was  required  on  the  part  of  the  assis- 
tants who  did  most  of  the  interviewing.  It  is  a  record 
of  which  any  manager  could  be  proud,  and  it  was  made 
by  the  use  of  an  application  blank  prepared  along 
scientific  lines — one  so  worded  that  a  comparatively 
low-priced  clerk  can  judge  accurately  the  quahfications 
of  a  high-priced  salesman. 

But  before  we  go  into  this  plan  in  detail  let  us  see 
what  investigation  reveals  about  the  questions  involved 
in  the  choosing  of  the  right  men  to  represent  the  firm 
or  house  on  the  sales  firing  line. 

First,  we  confront  the  problem :  Where  shall  we  look 
for  salesmen?  Shall  we  advertise  or  shall  we  develop 
men  from  within  the  organization,  and  shall  we  take 
trained  men  or  those  untrained  in  selling?  Second, 
what  qualifications  shall  we  look  for;  and,  third,  what 
methods  shall  we  use  to  decide  whether  the  applicant 
has  the  qualifications  we  desire?  Let  us  take  up  and 
consider  each  question  in  turn. 


Copyright,  1921,  by 

A.  W.  SHAW  COMPANY 

as  a  part  of  the  Shaw  Selling  Serie* 


2  BUILDING  UP  A  SALES  FORCE 

What  is  the  best  source  of  good  salesmen?  Do  the 
best  men  answer  newspaper  advertisements?  Here  is 
the  experience  of  several  sales  managers  on  this  first 
question  which  arises  with  the  necessity  of  adding  the 
right  new  men  to  the  sales  force. 

Applicants  secured  through  newspaper  advertise- 
ments are  not  usually  so  well  fitted  for  sales,  work  as 
men  obtained  from  other  sources,  in  the  opinion  of  the 
sales  manager  of  one  wholesale  concern.  His  experience 
has  been  that  the  better  class  of  trade  papers  and 
magazines  bring  salesmen  of  higher  caliber. 

One  manufacturer  says:  "If  a  salesman  is  capable 
he  is  pretty  sure  to  be  holding  down  a  job.  I  never 
hire  a  salesman  who  advertises  for  a  job  and  I  never 
advertise  for  a  man." 

On  the  other  hand,  the  sales  manager  of  a  concern 
which  makes  a  $10  specialty  believes  that  newspaper 
and  magazine  advertisements  if  properly  worded  will 
bring  the  best  type  of  men.  He  uses  a  blind  advertise- 
ment so  worded  as  to  give  an  accurate  impression  of  the 
business,  and  he  tells  the  amount  of  salary  he  will  pay. 
He  has  found  that  this  sort  of  advertising  brings  in  a 
large  number  of  applicants  of  a  high  standard. 

A  concern  which  manufactures  cans  found  that  one 
advertisement  calling  for  salesmen  on  a  commission 
basis  brought  a  very  poor  class  of  men,  while  a  later 
advertisement  which  mentioned  that  a  small  salary- 
would  be  paid  while  learning,  brought  over  400  replies 
from  a  much  higher  type  of  applicant. 

A  wholesale  grocery  concern  gets  many  of  its  best 
salesmen  from  behind  the  counters  of  retail  grocery 
stores.  This  company  instructs  its  salesmen  to  keep 
their  eyes  open  for  good  selling  material.  Whenever  a 
salesman  comes  across  a  particularly  bright  clerk  who 
seems  to  have  the  knack  of  selling  he  reports  to  the 
sales  manager.  The  young  man's  work  is  watched  for 
a  while  and,  if  he  continues  to  make  good,  when  the 


GETTING  EFFECTIVE  SALESMEN  3 

time  comes  he  is  taken  into  the  sales  organization.  This 
plan  gives  the  company  men  who  are  familiar  with 
selling  and  who  understand  the  retailer  and  his  prob- 
lems because  they  have  worked  behind  the  counter. 

"Many  of  our  best  salesmen  were  developed  from 
chauffeurs  and  mechanics,"  said  the  sales  head  of  one 
automobile-manufacturing  concern.  ''Very  few  of  our 
salesmen  are  obtained  outside  the  organization.  Many 
of  them  first  attend  night  school  to  get  the  funda- 
mentals of  sales  work,  and  if  they  have  the  stuff  in 
them  to  do  that,  they  are  pretty  sure  to  make  good." 

"We  recruit  our  sales  force  entirely  from  within  the 
organization,"  said  the  head  of  an  engraving  company. 
"The  men  first  are  trained  in  the  various  departments. 
We  have  never  made  a  practice  of  employing  men  who 
have  had  experience  with  other  engravers,  reasoning 
that  other  houses  would  not  let  good  men  go.  Hiring 
men  trained  in  other  lines  in  most  instances  has  not 
been  satisfactory,  either." 

HERE  ARE  THE  QUALIFICATIONS  ONE  KEEN  BUSINE8S 
MAN  SEEKS  WHEN  HIRING  SALESMEN 

The  following  sums  up  the  experience  of  a  shoe  whole- 
saler. Practically  all  the  salesmen  for  his  company 
have  worked  in  the  different  departments  of  a  shoe 
factory.  The  company  is  very  particular  about  the 
type  of  men  it  sends  on  the  road.  They  must  be 
young,  have  well-developed  powers  of  observation, 
and  be  neat  and  clean  in  appearance. 

"To  enable  the  men  to  hve  up  to  our  quahfications 
we  pay  them  well,"  remarked  this  wholesaler.  "We 
never  start  a  man  at  less  than  $1,500  a  year,  and 
expenses,  and  we  expect  them  to  earn  a  raise  every 
year.  If  a  man  is  not  worth  more  at  the  end  of  the 
year  we  are  pretty  likely  to  get  rid  of  him.  The 
company  does  not  want  a  man  who  is  entirely  satisfied 
with  his  sales  and  with  his  pay." 


4  BUILDING  UP  A  SALES  FORCE 

A  wire-and-steel-products  concern  hires  its  salesmen, 
you  might  say,  when  it  hires  its  office  boys.  The  boys 
are  picked  with  a  view  to  their  developing  into  sales- 
men. They  must  be  of  good  physique  and  have  at 
least  a  grammar-school  education.  Its  sales  manager 
says  he  does  not  want  boys  who  are  too  aggressive,  as 
his  experience  is  that  the  quiet  fellow  can  get  in  sym- 
pathy with  dealers  better,  and  is  the  most  successful. 

One  paint-and-varnish  company  gets  all  its  salesmen 
from  within  the  organization,  because  they  have  to  be 
specially  trained  to  sell  the  company's  products. 

A  wholesale  grocery  company  prefers  to  hire  men 
who  have  had  selling  experience  in  other  lines.  It 
prefers  to  get  a  man  who,  for  instance,  is  selling  shoes 
in  the  particular  territory  it  wants  a  man  for. 

Now  let  us  see  what  quahfications  employers  w^ant 
in  salesmen.  There  is,  investigation  indicates,  a  wide 
range  of  standards  on  this  point.  Some  concerns  are 
satisfied  if  the  applicant  has  adequate  personal  qual- 
ifications. Others  lay  stress  on  past  experience,  family 
history,  personal  appearance,  and  the  hke. 

One  shoe  manufacturer  looks  out  for  one  or  more  of 
the  following  qualifications.  First,  the  candidate  for 
the  selling  job  must  have  sold  shoes  in  some  territory 
to  the  retail  trade;  or,  second,  he  must  have  traveled 
the  territory  to  which  he  is  to  be  assigned  for  at  least 
a  year  for  any  one  hne,  or,  third,  he  must  have  sold 
shoes  at  either  wholesale  or  retail  at  some  point  in  the 
territory.  The  man  who  is  familiar  with  traveling  the 
territory  is  preferred.  Usually  he  knows  best  how  to 
get  around  economically,  understands  the  local  cus- 
tomers, and  knows,  or  can  quickly  learn,  their  needs. 

On  the  other  hand  the  man  who  has  sold  shoes  can 
quickly  learn  the  territory — its  needs  and  its  trans- 
portation facilities.  Men  who  have  lived  in  the 
territory  should  know  its  needs  fairly  well,  and  need  to 
learn  only  tlie  line  and  the  manufacturer's  particular 


GETTING  EFFECTIVE  SALESMEN  5 

selling  angle.  Men  who  have  traveled  the  territory 
for  other  houses,  not  necessarily  in  shoes,  would  have  to 
learn  the  line.  If  the  man  aheady  lives  in  the  territory 
he  usually  can  get  home  every  week  end,  which  is 
considered  an  advantage  to  the  house. 

Another  sales  manager  emphasizes  the  quality  of 
persistence  when  selecting  a  salesman.  His  deciding 
test  is  this.  After  he  has  made  up  his  mind  that  the 
appUcant  stacks  up  to  other  requirements,  he  tells 
him  he  does  not  believe  he  will  make  good  selling  the 
line.  From  the  applicant's  answer  he  normally  can 
tell  whether  the  man  is  easily  discouraged  or  not. 

Another  sales  manager  prefers  men  who  show  them- 
selves to  be  ambitious.  He  usually  asks  the  applicant 
why  he  thinks  he  can  sell  gas  engines.  The  answer 
gives  him  an  idea  of  the  man's  attitude  toward  sales- 
manship, leads  to  a  discussion  of  his  ambitions,  and 
gives  him  a  line  on  the  applicant's  general  char- 
acteristics and  probable  future  development. 

After  deciding  on  the  qualifications  we  desire  how 
are  we  to  tell  when  a  salesman  has  these  qualifications? 
Many  sales  managers  believe  in  personal  interviews 
and  a  quick  judgment  based  on  first  impressions.  Let 
us  go  back,  however,  and  examine  in  detail  the  care- 
fully worked-out  system  mentioned  at  the  very  begin- 
ning of  this  section,  the  one  which  enabled  five  con- 
cerns to  select  an  average  of  seven  successful  sales- 
men out  of  eight  applicants. 

We  will  let  the  sales  expert  who  worked  out  this  plan 
— Elbert  Clarke — tell  his  story  in  his  own  words.  In 
it  he  explains  his  attitude  toward  salesmen,  shows  how 
he  classifies  and  ranks  applicants,  and  gives  his  reasons 
for  emphasizing  the  qualities  he  does. 

"When  we  choose  a  salesman  we  buy  something," 
begins  Mr.  Clarke,  ''and  after  the  opportunity  of  closer 
inspection  it  sometimes  happens  we  are  not  altogether 
pleased  with  what  we  have  bought.    The  choosing  of 


6  BUILDING  UP  A  SALES  FORCE 

a  salesman  is  not  greatly  different  from  the  purchase 
of  wares  to  fill  other  needs.  An  experienced  buyer  of 
cotton  cloth  measures  the  number  of  threads  to  the 
inch,  the  strength  of  the  threads,  the  regularity  of  the 
print,  the  fastness  of  the  colors,  and  other  specific 
requirements  bearing  on  the  quality,  usefulness,  and 
service  of  the  cloth. 

"When  a  buyer  selects  material  according  to  specific 
requirements,  he  purchases  scientifically.  If,  however, 
he  is  attracted  to  the  artistic  appearance  of  the  cloth 
and  does  not  definitely  inspect  the  weave,  fastness  of 
color,  and  so  forth,  he  makes  a  haphazard  purchase; 
and  I  believe  that  many  employers  select  salesmen  in 
the  same  haphazard  way,  instead  of  getting  down  to 
hard  facts  and  definitely  deciding  just  how  much 
qualification  each  applicant  possesses. 

WHEN   YOU   HIRE   SALESMEN   DO  YOU  GO  ABOUT  IT 
SCIENTIFICALLY  OR  HIT-OR-MISS  STYLE? 

"Perhaps  it  is  because  salesmen  as  a  merchandise 
entity  have  not  as  definite  qualifications  as  the  strength 
of  the  fiber  of  cloth,  its  color,  or  its  weave,  that  so  many 
selections  are  made  without  other  analysis  of  the  sales- 
man than  the  finding  out  of  how  much  he  sold  for  some 
other  company.  However,  if  we  determine  the  salient 
qualifications  which  all  salesmen  should  have  to  sell 
merchandise  successfully,  we  can  analyze  prospective 
salesmen  scientifically  by  a  process  fundamentally 
similar  to  the  purchase  of  cotton  cloth  or  any  other 
commodity.  The  scientific  selection  of  a  salesman 
augments  the  usual  methods  of  instinctive  selection 
and  insures  a  better  selection  than  one  which  is  based 
on  intuition  alone. 

"The  scientific  selection  of  a  salesman  means 
definitely  testing  the  qualities  of  the  man  whose 
services  we  would  purchase.  In  fact,  scientific  buying 
of  both  merchandise  and  salesmen  differs  from  hap- 


APPLICATION  FOR  POSITION  AS  SALESMAN 
TO  CHICAGO  MANUFACTURING  COMPANY 


Age  2  7     Nationality  /^'^-^vwt-^  -   Rollgton  ^ 


HBight  S'   Ft.  /-^Inches 


nn  yon  \i^R   tobacco 
Marrifld    "Mi.^.    Ch; 


Weight     /S'O Hej>>th. 


58   tobacco  %iL-  Do  vou  use  intoxicants  ')]r-  Sta<e   languages  spoken chi 

14j^     Chiiaren       / State   fraternities,    lodges,   etc.    W dA^fjK  ,  ^f/ 


Do  Not 
Brits  Here 


10 


1 .  Dp  vou  cor.s  1  d ■? .'■  personal  appea ranee  very  Importan 
^ i talS _h oy_^ in  your  ^qpipion,  a  salesman  s^ou^d 

A21£CZL 


ase  5  tals  _0  <y'   in  .your  ^opipiona.  salesman  sbou^d  dres; 
t  p&rfe onal^  cha ractenstics  d^  -you  conside^r  vou  posses 

learn 


Wtmt  p6rS  onal  cha  racteristicsdajou  consider  vou  •absse^^t^^^  M^^iju^yr 

2.  Are  vou  quick  at  learning?  ^J,      Are  vo^  fond  of  matching  wits  and 
repartee?    ^i^y/7^yi^  I 


Business  or  trade 


College  or  uniVBrsitv 


Home  or  correspondence 


Post  graduate. 


NAlffiS  OP  SCHOOLS 


"M  tf^A.^ 


im- 


un- 


mi. 


Jill 


Graduate 
or  not 


-JEL 


Degrees  or 

Courses 


fiW  'Xf.tji^.lmt 


^Ttt^rCiu. 


4.  Please  use  reverse  of  this  sheet  and  describe  fully  your  sales  experience. 

5.  Are  vou  familiar  with  our  product?       //f      Please  sta^e  a_  few_  pointSfOf 
superiority  of  our  product  over  that  of  c 

With  what  products  inher  than  ours  am  yon   familiar?  '^diurl  Aiit^i/r  /!mwt^ 

6 .  Do  you   like   to  solve  puzzles  and  problems?   ^K^   Are  you  ever  discouraged? 
^Y^2^T>f---  How  would  you  attempt  to  secure  y^jr  competitors'   customers? 


8.   How  closely  should  a  salesman  adhere   to  the  facts  about  his  goods?  I'H-' 
'  "  yViyyi.'t/T^  cmytc^  ^Jma/u/Z.  rT^  .//^t a.^cya^^   at-  at/xaZ^ 


9.    Do  you  attend  many  social    functi 

^ jytyt/l-    Have  vou  many   real   frie.ids 
conventionalities  of  etiquette 


yoif  make   friends  very  easily? 
'i/yy(L-   Are  vou  familiar  with  the 


10     Are  you  qoick  to  anger?       iiK    Why  should  a  salesman  be  diplpnatlc7,^^'^^fc«^ 

Salary  desired  8  XS'O  nonthjy 

Least  salary  considered  %  J  JO  monthly. 
Present  or  last  salary  $  3./)0  monthly. 
When  would  you  be  available?     ^<tl-<      ^ 


Figure  1:  The  salesman-applicant's  qualifications  can  be  well  judged 
on  this  blank.  The  essential  information  is  secured  without  embar- 
rassing the  applicant.  Note  that  the  applicant  is  graded  on  10  simple 
questions  which  determine  his  classification  and  potential  sales  value. 


8  BUILDING  UP  A  SALES  FORCE 

hazard  buying  in  the  definitcness  with  which  the 
requirements  of  the  material  purchased  are  tested  and 
known  before  the  purchase  is  made. 

"Scientific  choosing  of  a  salesman  may  be  brought 
to  a  standard  practice  so  simple  and  definite  that  an 
inexperienced  clerk  is  able  to  determine  which  appli- 
cants are  worth  while  for  the  sales  manager  to  inter- 
view. An  application  blank  can  be  so  worded  that 
many  of  the  qualifications  of  the  applicant  may  be 
determined  in  definite  points,  for  or  against  him,  and 
without  seeing  or  talking  with  the  applicant,  a  fair 
indication  of  his  qualifications  to  become  a  successful 
salesman  may  be  determined  by  the  employer.  We 
can  consider  that  each  of  10  essential  qualifications 
(Figure  1)  are  equal  to  10  points  and  that  any  sales- 
man who  does  not  pass,  say  a  50%  examination,  would 
not  be  worth  a  personal  interview. 

''The  application  blank  for  salesmen  applicants 
indicates  hov/  the  quahties  of  the  man  applying  for  a 
position  as  salesman  are  tested  by  his  answers  to  simple 
questions.  Space  is  provided  at  the  left  of  the  num- 
bered questions  in  which  to  write  the  percentage  of 
accuracy  with  which  respective  questions  are  answered. 
Completeness  of  answers  also  is  a  big  point. 

"Total  percentages  accorded  for  the  10  questions 
are  placed  in  the  upper  right-corner  against  'Class.' 
Against  the  word  'Grade'  the  letter  A  is  used  to 
represent  a  high-grade  man  who  has  made  full  answers 
and  indicated  by  his  answers  that  he  has  considerable 
initiative.  The  letter  B  is  used  as  a  mark  for  a  sales- 
man who  apparently  will  need  slight  supervision  and 
direction.  The  B  man  ought  to  be  capable  of  taking 
over  an  agency  or  becoming  a  submanager.  Letter 
C  indicates  a  man  of  moderate  ability  who  has  never 
had  much  responsibility  entrusted  to  him.  Against 
the  word  'value'  is  placed  the  price  at  which  the  sales- 
man probably  could  be  employed. 


APPLICATION  FOR  SALESMAN'S  POSITION 


liame  Address  Date 

Age  Height  Salary  expected 

When  available 
1.     State  briefly  your  previous  experience 

2.  With  vhat    lines  are  you  most  fBmiliar? 

3.  Why  do  you  want  to  sell  our  goods? 

4.  Is  your  health  goo^l? 

5.  Are  you  married?  Chlldtren?  Live  with  your  wife? 

6.  Do  you  save  money? 

7.  r/hat  recreation  do  you  enjoy  most? 

Are  your  personal  habits  good? 

8.  What  do  you  believe  to  be  your  greatest  weakness? 

Your  greatest  asset? 

9.  What  books  and  magazines  do  you  read? 

10.  Are  you  optimistic?  Ambitious? 

11.  Do  you  lose  your  temper  easily? 


Figure  2:  On  this  form  the  salesman-applicant  is  asked  to  give  full 
information  about  his  general  characteristics  and  habits.  From  this 
data  the  sales  manager  decides  whether  or  not  the  prospect  is  a  capable 
man,  and  places  him   in   one   of  two  distinct  ability  classifications. 


10  BUILDING  UP  A  SALES  FORCE 

"With  this  form  in  mind  I  will  discuss  the  10  ques- 
tions in  Figure  1  and  show  why  I  think  these  are 
essential  qualifications  for  effective  salesmanship.  That 
the  classification  is  an  effective  one  is  proved  by  the 
success  with  which  it  has  been  applied  in  the  five  con- 
cerns. The  apphcant  who  filled  out  this  particular 
blank  passed  with  a  rank  of  91  and  is  an  A-grade  man: 

1.  The  personal  appearance  of  an  appUcant  indi- 
cates the  probability  or  improbability  of  his  possessing 
the  remaining  nine  qualifications.  Unkempt  clothing 
and  uncleanliness  in  details  of  attire  indicate  a  lack 
of  self-respect,  determination,  experience,  and  so  forth. 
The  quick-witted  individual  soon  discovers  that  a 
little  attention  to  dress  and  cleanliness  often  gets  him 
audience  which  salesmen  who  do  not  pay  attention 
to  these  details  have  difficulty  in  obtaining. 

Poor  personal  appearance  marks  a  lack  of  expe- 
rience, because  the  dullest  salesmen  soon  discovers  that 
a  pleasing  personal  appearance  is  worth  all  the  effort 
it  costs  him.  A  salesman  need  not  have  on  a  new  suit 
of  clothes  or  a  diamond  ring  to  be  a  successful  sales- 
man. In  fact,  the  man  who  makes  big  sales  is  infre- 
quently flashily  attired.  The  clean-cut,  keen-eyed, 
inconspicuously  but  neatly  dressed  apphcant  has  100% 
to  his  credit  on  this  qualification. 

2.  An  alert  mind,  a  quick  understanding,  is  par- 
ticularly desu-able  in  a  salesman,  because  a  quick  com- 
prehension of  situations  which  arise  during  a  call,  and 
the  abihty  to  say  the  right  word  at  the  right  time, 
greatly  assist  the  salesman,  while  a  lack  of  under- 
standing may  entirely  prevent  his  making  a  sale.  An 
alertness  of  mind  and  an  intelligent  answer  of  ques- 
tions frequently  removes  distrust  from  the  mind  of 
the  buyer. 

Many  a  salesman  would  have  been  a  success  if  he 
could  have  said  in  that  given  second  when  he  had  the 
opportunity,  the  words  which  after  the  interview  he 


GETTING  EFFECTIVE  SALESMEN  11 

decides  would  have  clinched  the  sale.  The  quick, 
alert,  active  mind  has  an  advantage  in  selling  over  the 
slow,  methodical  thinker.  The  apphcant  who  asks 
questions  of  his  prospective  employer  to  get  a  grasp 
of  the  situation,  the  apphcant  who  anwers  questions 
quickly,  intelligently,  and  to  the  point,  and  the  appli- 
cant who  is  able  to  parry  questions  without  creating 
distrust  in  the  employer,  qualifies  on  the  second 
requisite.  Such  an  apphcant  will  probably  make  a 
sale  before  the  buyer  can  pin  him  down  with  an  un- 
answerable reason  for  not  buying. 

HERE  YOU  SEE  WHAT  A  BIG  PART  A  FAIR  EDUCATION 
PLAYS  FOR  THE  SUCCESSFUL  SALESMAN 

3.  An  adequate  education  plays  an  important  part 
in  the  success  of  a  salesman  because  in  his  meeting 
with  men  he  must  be  versatile  to  hold  the  attention 
and  win  the  confidence  and  the  interest  of  buyers. 
We  all  like  the  people  who  hke  the  things  we  hke. 
Similar  likes  are  a  common  bond  of  friendship  and 
esteem.  The  successful  salesman  frequently  appeals 
to  the  purchaser  through  some  mutual  acquaintance 
or  knowledge  and  the  more  general  the  education  of  the 
salesman,  the  better  his  chances  are  of  success.  The 
successful  candidate  for  a  position  as  a  salesman  need 
not  necessarily  have  graduated  from  a  college  or  even 
a  high  school  but  he  should  be  able  to  convince  his 
prospective  employer  that  he  has  a  fair  grasp  of  a 
number  of  subjects  and  especially  that  he  has  compre- 
hensive ideas  on  those  subjects  particularly  apphcable 
to  the  business  in  which  he  is  applying  for  the  position. 
A  salesman  with  an  alert  mind  can,  however,  succeed 
without  so  much  education,  where  a  salesman  with  a 
slower  moving  mind  must  depend  more  upon  his 
general  knowledge  and  education. 

4.  Experience  is  so  vital  a  factor  in  successful 
selling  that  many  employers  of  salesman  seek  to  find 


12  BUILDING  UP  A  SALES  FORCE 

out  from  the  applicant  nothing  but  what  experience  he 
has  had  as  a  salesman.  The  applicant's  experience 
perhaps  more  closely  gages  his  present  ability  as  a 
salesman  than  any  other  qualification  which  we  have 
suggested,  but  it  is  difficult  to  find  salesmen  with  a  full, 
rounded-out  experience  and  the  big  question  in  em- 
ploying most  salesmen  is  whether  there  is  the  "mak- 
ing" of  a  good  one  in  the  applicant. 

5.  If  a  salesman  possesses  an  alert  mind,  a  fair 
education,  and  a  little  experience,  he  is  qualified  to 
become  familiar  with  almost  any  type  of  product  in  a 
reasonable  length  of  time.  If  a  salesman  is  questioned 
about  the  products  which  he  has  sold,  it  takes  but  a 
few  minutes  to  find  out  his  grasp  of  their  salient  selling 
points  and  of  his  ability  to  present  the  merits  of 
goods  from  a  sales  standpoint.  A  salesman  may  know 
all  about  the  good  points  of  a  product  and  yet  not  be 
able  to  pick  out  the  features  which  would  interest  a 
buyer.  Many  salesmen  who  have  been  schooled  in 
the  selling  features  of  a  product  simply  unreel  to  the 
buyer  everything  they  have  been  taught,  hoping  that 
he  will  automatically  pick  out  the  points  that  should 
appeal  to  him  and  say:  "I  will  buy." 

In  choosing  salesman,  the  applicant  always  should 
be  questioned  closely  on  his  familiarity  with  goods 
which  he  has  sold  to  determine  his  ability  to  select 
and  present  forcefully  the  merits  of  your  product. 
Many  applicants,  if  asked  to  tell  the  strong  points  of 
the  goods  they  have  sold,  will  commence  to  sprout  a 
stereotyped  house-to-house  canvass  just  as  they  have 
learned  it,  and  as  automatically  as  a  talking  machine. 
But  the  effective  salesman  will  ''sell"  you. 

6.  Courage  and  determination  play  quite  as  great 
a  part  in  selling  as  in  any  other  phase  of  fife.  A  weak 
spinal  column  and  a  spongy  mind  have  no  place  in  a 
real  sales  organization.  The  acid  test  for  determination 
and  stamina  will  more  often  prevent  a  prospective 


GETTING  EFFECTIVE  SALESMEN  13 

salesman  from  securing  a  position  than  any  of  the 
other  tests  in  scientifically  choosing  a  salesman.  A 
shifty-eyed  applicant  usually  has  not  the  courage  to 
face  the  big  buyer.  The  employer  frequently  can  test 
the  courage  and  determination  of  the  applicant 
effectively  by  picturing  to  him  the  difficulties  of  the 
position  he  is  applying  for. 

If  the  applicant  is  easily  brought  to  believe  that 
the  position  is  too  difficult  for  him,  much  expense  will 
have  been  saved.  Courage  and  determination  in  a 
man  indicate  ambition  and  intelligence — they  go  hand 
in  glove  every  time  with  success. 

Without  "pep"  and  determination,  the  prospective 
salesman  will  never  be  able  to  influence  the  mind  of 
the  buyer  to  buy.  Salesmen  without  "pep"  and  the 
will  to  succeed  are  misnomers.  They  are  never  under 
any  circumstances  more  than  order  takers. 

Lack  of  determination  and  courage  mean  lack  of 
dependability  and  contribute,  I  believe,  to  the  loss 
of  more  sales  than  almost  any  other  deficiency.  A  sales- 
man without  determination  and  courage  will  not,  as  a 
rule,  see  the  trade  regularly.  He  is  the  salesman  who 
comes  out  of  the  hotel  around  10:30  or  11  o'clock  in 
the  morning,  takes  two  hours  off  for  luncheon,  and 
knocks  off  around  3:30  in  the  afternoon.  I  would 
waive  in  some  measure  good  appearance,  education, 
experience,  and  familiarity  with  the  product,  if  the 
applicant  has  determination  and  courage. 

7.  A  knowledge  of  human  nature  is  an  important 
requisite  in  a  salesman.  Abihty  to  make  a  buyer  sign 
an  order  often  springs  from  a  salesman's  sizing-up  of 
the  human  equation  involved.  A  salesman  unfamiliar 
with  handling  men  almost  invariably  will  use  the  wrong 
tactics  to  secure  an  order,  and  not  infrequently  he 
loses  the  customer  for  all  time. 

In  choosing  salesmen,  I  Hke  to  test  the  salesman's 
judgment  of  human  nature  by  the  way  he  attempts  to 


14  BUILDING  UP  A  SALES  FORCE 

sell  his  services  to  me.  I  like  to  note  how  he  sizes  me 
up  and  the  tactics  he  uses  to  convince  me  that  he  is  the 
man  for  the  job.  It  is  surprising  how  many  applicants 
for  sales  positions  sit  before  me  Hke  a  bag  of  meal 
waiting  for  me  to  buy  them.  They  make  no  attempt 
whatever  to  convince  me  that  they  are  the  man  for 
the  place.  Some  seem  to  be  content  merely  to  parry 
my  questions  and  to  try  to  prevent  me  from  discover- 
ing what  they  are  capable  or  incapable  of  doing.  This 
attitude  is  a  common  one  and  does  harm  all  around. 
One  good  test  of  an  applicant's  abihty  to  size  up 
human  nature  is  for  employers  to  ask  the  applicant  to 
describe  the  way  in  which  he  would  appeal  to  and 
attempt  to  sell  to  a  dyed-in-the-wool  grouch.  It  is 
surprising  how  few  men  can  even  indicate  in  slight 
degree  how  they  would  approach  any  particular  type 
of  man.  In  fact,  few  applicants  for  positions  as  sales- 
men appear  ever  to  have  attempted  to  classify  the 
types  of  men  they  meet  every  day. 

WHY  PREVIOUS  EMPLOYERS'  RECOMMENDATIONS  CANNOT 
BE  ABSOLUTELY  DEPENDED  UPON 

8.  The  usual  questions  which  employers  ask  of  an 
apphcant's  previous  employers  are  those  on  trust- 
worthiness, character,  and  ability.  On  ability,  how- 
ever, but  little  worth-while  information  is  ever  forth- 
coming from  a  previous  employer,  I  have  found. 
References  usually  state:  "We  beUeve  that  Jordan  is  a 
good  man.  He  sold  successfully  for  us,"  and  so  on. 
Whether  selling  successfully  means  that  they  made 
$25  a  week  on  the  salesman,  and  that  he  sold  about 
one  tenth  of  what  he  should  have  sold  in  the  territory 
to  which  he  was  assigned,  or  whether  it  means  that  he 
made  90%  of  the  sales  that  reasonably  could  be 
expected  from  his  territory,  is  rarely  stated.  The 
references  of  a  salesman,  therefore,  usually  are  most 
valuable  on  the  angles  of  trustworthiness  and  honesty. 


GETTING  EFFECTIVE  SALESMEN  15 

It  is,  I  think,  necessary  to  know  something  more 
about  the  trustworthiness  and  honesty  of  a  salesman 
than  merely  that  he  has  not  served  a  jail  term.  It  is 
a  good  plan  to  test  the  honesty  of  the  apphcant  by 
finding  out  how  far  away  from  the  truth  he  feels  justi- 
fied in  going  to  secure  a  sale  or  how  far  he  will  exag- 
gerate in  describing  the  product  he  is  selling.  I  beheve 
that  a  salesman  has  every  right  to  describe  his  wares 
favorably,  but  it  does  not  lead  to  permanent  sales 
development  to  overstock  the  buyer  or  to  mislead  him 
on  quality.  There  usually  is  an  awful  reaction  to  this 
type  of  selling,  sales  managers  will  agree. 

The  honesty  and  trustworthiness  of  the  apphcant 
also  indicates  his  ability  to  make  and  keep  friends,  to 
obtain  new  customers,  and  tends  to  show  what  may  be 
expected  from  him  in  developing  his  territory. 

9.  If  a  salesman  is  selling  sewer  pipe  to  a  rough, 
burly  contractor  he  may  not  need  to  be  too  much  of 
a  gentleman.  As  a  matter  of  fact,  there  are  a  number 
of  sales  positions  in  which  too  great  politeness  would  be 
more  of  a  handicap  than  a  help.  The  salesman  must 
meet  his  customer  on  his  level,  but  it  is  pleasant  to 
know,  nevertheless,  that  your  salesman  could  be 
poHshed  if  necessary.  A  salesman's  experience,  deter- 
mination, knowledge  of  human  nature  and  trustworthi- 
ness indicate  how  gentlemanly  he  can  be  when  occasion 
requires.  Gentlemanhness  might  be  termed  the  art 
of  winning  the  respect,  friendship,  and  esteem  of  the 
buyer.  The  gentleman  always  has  a  stronger  influence 
with  the  customer.  The  salesman  who  can  be  a  gentle- 
man safeguards  his  prospective  sale  by  not  offending 
the  customer,  intentionally  or  unintentionally. 

10.  The  diplomacy  and  tact  of  the  applicant  com- 
pletes our  search  into  his  qualifications  as  a  sales- 
man. It  is  by  diplomacy  alone  that  we  often  sell  our 
ideas,  our  products,  and  our  services.  I  test  the  diplo- 
macy of  a  salesman  by  noting  his  ability  to  "coast"; 


16  BUILDING  UP  A  SALES  FORCE 

by  this  I  mean  his  ability  to  be  non-committal  and  yet 
to  hold  the  interest  of  the  purchaser  until  after  an 
insight  into  the  idiosyncrasies  of  the  buyer  has  been 
gained.     Then  he  can  use  it  to  make  the  sale. 

Some  salesmen  rush  in  where  angels  in  truth  might 
fear  to  tread.  An  applicant  who  is  diplomatic  will  not 
commit  himself  by  undertaking  to  appeal  to  his 
customer  until  he  has  had  an  opportunity  of  sizing  up 
the  characteristics  of  the  buyer.  A  good  ''coaster" 
floats  when  in  doubt.  He  will  not  commit  himself, 
until  he  is  sure  of  his  ground  and  he  saves  himself  from 
walking  into  the  buj^er's  trap  and  losing  a  sale  through 
psychological  or  other  blunders. 

The  choosing  of  a  salesman,  of  course,  is  not  yet 
an  exact  science,  but  if  an  employer  will  measure  up 
a  few  definite  qualifications  of  an  applicant  in  the  same 
way  that  he  looks  into  the  merits  of  merchandise,  the 
probability  of  building  an  effective  sales  organization 
is  much  more  certain.  And  scientific  choosing  of  a 
salesman  does  not  mean  a  lot  of  red  tape.  It  merely 
means  knowing  what  you  require  in  a  salesman,  and 
finding  out  whether  the  applicant  fills  enough  of  these 
requirements  to  justify  the  purchase  of  his  services. 

How  another  sales  manager  determines  whether  an 
apphcant  has  the  necessary  qualities  for  selling  is 
shown  in  Figure  2.  This  blank  asks  for  much  the 
same  information  as  the  one  just  discussed,  but  in  a 
little  different  form.  It  puts  it  up  to  the  salesman  to 
interpret  his  own  abilities  more  fully,  perhaps,  and 
leaves  less  to  be  interpreted  from  the  answers.  This 
sales  manager  classifies  salesman  under  two  heads; 
those  who  sell  simple  types  of  goods  to  simple  types  of 
minds,  and  those  who  sell  complicated  or  expensive 
propositions  or  products  to  customers  of  a  more  highly 
developed  type  of  mind.  As  a  rule,  the  younger  men 
are  more  successful  in  work  under  the  first  head  because 
they  usually  have  more  enthusiasm  and  more  interest 


APPLICATION  BLANK 

Mason-Adams  Company 


Dated  at. 


1  am  considering  an  appointment  as  salesman  with  your  Company,  and  for  your  infortna 
tion,  pending  final  negotiations,  submit  answers  to  the  following  questions: 

1.  What  is  your  age? Nationality?. .Married  or  single? 

2.  What  is  your  present  occupation? _ — — ■ — . 


3.     Name  and  address  of  present  or  last  employer ?_ 


4.    Type  of  business  and  work  performed?- 


5.    Through  whom  did  you  learn  of  this  special  branch  of  our  business?- 


6.  Do  you  desire  permanent  position,  if  successful? 

7.  How  much  available  cash  have  you  on  hand  for  expenses? 

8.  Do  you  wish  to  devote  all  your  time  to  this  business? 

9.  When  do  you  wish  to  begin  work? 


10.    Can  you  go  to  any  field  assigned  you? 
Jl.    Home  address?- 


12.     Mail  address  for  next  10  days?- 


GIVE  THREE  REFERENCES  (Business  Men). 
N;VME  ADDRESS  BUSINESS  OCCUPATION 


(Sign  here) 


NOTE:  The  above  questions  must  be  answered  fully;  and  such  answers  will  greatly 
facilitate  negotiations.  We  make  no  arrangements  until  the  applicant  has  satisfied  us  by 
references  as  to  his  fitness  for  the  work. 

Adiiicu  all  communicationB  to  MASON  ADAMS  COMPANY 


Figure  3:  One  concern  which  does  not  use  a  "regular"  application 
blank,  finds  this  information  form  effective.  The  prospective  sales- 
man fills  the  form  out  after  he  has  applied  in  person,  and  has  been 
interviewed.     Salesmen  rarely  object  to  this  form,  it  has  been  found. 

17 


18  BUILDING  UP  A  SALES  FORCE 

in  human  nature  generally,  while  older  men  are  better 
for  the  "heady"  type  of  selling.  This  type  usually 
emphasizes  the  merits  of  the  goods  better. 

Another  concern  which  has  a  long  and  complicated 
list  of  questions  for  applicants  for  sales  positions  to 
answer,  believes  that  this  is  the  best  method  of  keep- 
ing dishonest  applicants  from  the  payroll.  Its  form 
fills  four  pages,  covering  every  phase  of  a  man's  past 
experience  in  all  connections. 

It  must  be  stated,  however,  that  many  good  appli- 
cants are  dismayed  at  the  sight  of  a  voluminous  appli- 
cation blank,  and  some  are  lost  to  the  concern  for  this 
reason.     But  the  plan  is  worth  this  price,  it  is  believed. 

In  hiring  salesmen  one  eastern  sales  manager  asks 
questions  which  will  bring  out  the  temperament, 
habits,  and  likes  and  dislikes  of  applicants.  Then  he 
makes  a  chart  of  their  characteristics.  Those  that  he 
hires  he  puts  into  classes — for  example,  those  that  he 
thinks  must  be  driven  go  in  one  class;  those  that  have 
to  be  moved  by  financial  appeals  in  another;  those  that 
will  respond  best  if  selling  is  made  a  sporting  proposi- 
tion in  another,  and  so  forth.  He  has  worked  out  a 
series  of  personal  letters  to  stir  up  each  class. 

IF  YOUR  BUSINESS  IS  SUBJECT  TO  THESE  CONDITIONS, 
THIS  PLAN  MAY  HELP  YOU  MIGHTILY 

But  suppose  yours  is  a  line  in  which  there  are  definite 
selling  seasons  which  are  soon  over.  Perhaps  you  want 
salesmen  for  only  a  few  months  but  find  it  hard  to  get 
men  to  take  work  under  these  conditions.  If  so,  you 
will  be  interested  in  a  simple  plan  used  by  one  sales 
manager  in  a  like  situation  to  get  good  men.  He 
promises  to  help  them  get  another  job  when  the  season 
is  over  and  they  are  no  longer  needed. 

He  makes  good  his  promise  by  a  letter  similar  to  the 
following,  which  he  sends  out  to  a  number  of  first- 
class  concerns  at  the  close  of  his  season. 


GETTING  EFFECTIVE  SALESMEN  19 

Dear  Sir: 

We  can  and  want  to  place  in  your  organiza- 
tion 10  competent  salesmen.  We  know  they  are 
good  men  because  they  worked  for  us  for  some 
months  and  we  have  thoroughly  tested  them 
out.  The  fact  that  they  are  still  in  our 
organization  proves  that  they  are  men  who 
have  survived  a  vigorous  sifting  process. 

Most  of  these  men  have  been  with  us  since 
early  spring  and  have  worked  the  western  and 
southern  states.  In  this  letter  we  will 
merely  give  you  their  names  and  territories 
which  they  have  been  covering  for  us.  The 
reason  that  we  are  about  to  discontinue  their 
services  is  that  our  active  selling  season 
ends  between  August  15  and  September  15.  and 
we  therefore  cannot  continue  these  men  beyond 
the  last  named  date. 

(Here  follows  the  names  of  the  men  and  the  territories  covered.) 

These  10  men  represent  the  pick  of  a  force 
of  45.     They  are  men  whom  we  feel  we  ought  to 
make  a  special  effort  to  place,   and  we  accept 
the  responsibility  of  recommending  them  to 
you. 

We  can  have  any  of  these  men  write  you 
direct  or  you  can  inform  us  where  they  can 
best  see  your  representative.    We  are  writing 
you  in  this  way  because  we  have  a  high  opinion 
of  these  men,    and  we  feel  that   in  trying  to 
place  them  with  you  we  are  helping  out  all 
around. 

Let  us  consider  one  more  example  of  building  the 
sales  force  right,  as  expressed  by  a  business  man  who 
has  employed  hundreds  of  salesmen. 

He  says:  "It  is  necessary  to  see  a  man  two  or  three 
times  before  he  can  be  properly  sized  up.  No  man 
should  be  hired  on  the  first  interview.  It  is  a  good 
idea  to  have  more  than  one  man  see  a  man  before  he  is 
employed.   I  have  an  applicant  see  two  or  three  of  my 


20  BUILDING  UP  A  SALES  FORCE 

men,  and  then  they  get  together  and  compare  their 
impressions.  It  is  poor  policy  to  employ  men  who  can- 
not be  fired  as  easily  as  they  were  hired — this  apphes 
particularly  to  relatives  and  friends." 

Some  of  the  questions  this  manufacturer  uses  for  his 
third-degree  of  salesmen  applicants  are: 

Can  he  furnish  a  security  bond?  Ninety-nine  times  out  of  a 
hundred  there  is  something  wrong  with  a  man  who  cannot. 

Has  he  a  reason  for  leaving  his  last  employer?  Can  he  give  his 
last  employer  as  well  as  employers  further  back  as  references? 

Did  he  work  as  a  boy  or  was  he  brought  up  in  idleness? 

Does  he  overindulge  in  liquor,  tobacco,  and  the  like? 

Has  he  any  money  saved?  If  not,  why  not? 

Can  he  answer  objections  quickly?  Try  him  out  by  asking  him 
why  he  thinks  he  can  sell  j'our  goods. 

Is  his  voice  pleasing  or  rasping?  Does  his  voice  and  manner 
impress  you  as  carrjang  conviction? 

Has  he  respect  for  the  opinion  of  others? 

Is  he  enthusiastic?    Does  he  know  when  to  stop  talking? 

Is  he  easily  discouraged  when  told  he  can't  have  the  job  or  that 
you  don't  believe  he  can  sell  your  goods? 

Is  he  willing  to  undergo  a  course  of  training? 

So,  from  the  experience  of  progressive  concerns  we 
find  that  fitting  the  salesman  to  the  job  apparently 
requires  the  same  fundamental  attention  that  hiring 
men  for  any  line  of  work  does.  The  requirements  of 
the  job  must  be  learned,  and  the  qualifications  of  the 
applicant  matched  against  them.  When  this  is  done, 
guesswork  in  hiring  largely  is  eliminated  and  the  manu- 
facturer, wholesaler,  or  sales  manager  does  not  have 
to  reproach  himself  for  so  many  failures. 


"'■•^ 


"POURING  the  Great  War  business  men  all  over 
the  country  came  to  Icnow  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbolize  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  Publica- 
tions are  now  housed  is  a  permanent  counterptart 
in  stone  of  the  building  that  business  men  Imew 
so  well  during  the  war. 


K.. 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
of  tht  A.  W.  SHAW  COMPANY 


SECTION  4 

How  to  Place  Salesmen 
and  Handle  Them 


HOW  ONE  SALES  MANAGER  HANDLES  HIS  MEN 

EVERY  salesman  needs  supervision  of  some  sort. 
There  must  be  a  real  personal  contact  between 
the  salesman  and  the  sales  manager  if  both  are 
to  get  the  best  results.  Your  first-class  seller  almost 
always  is  an  imaginative,  somewhat  romantic  type 
who  can  be  depended  upon  to  exercise  selling  skill,  but 
who  cannot  always  be  depended  upon  to  reason  out 
or  to  see  the  "why"  of  necessary  policy  or  price 
changes.  Your  typical  salesman  sometimes  will  be 
erratic  in  his  sales  and  perhaps  wander  away  from  the 
lines  that  you  want  him  to  sell.  Your  poor  salesman 
may  be  (and  probably  will  be)  an  expert  excuse  writer. 

Each  class  needs  some  sort  of  supervision.  The 
topnotcher  has  to  be  made  to  feel  that  the  sales  manager 
and  the  company  have  his  interest  at  heart,  and  that 
they  do  not  make  changes  in  policy  or  price  primarily 
to  increase  the  difficulty  of  selling.  The  middle-grade 
salesman  needs  an  occasional  keel-hauling,  while,  with 
the  low-grade  man  the  chief  concern  of  the  sales 
manager  usually  is  to  spot  him  and  fire  him  quick. 

As  I*  see  sales  supervision,  it  is  entirely  a  personal 
problem  except  with  the  low-grade  force  which  sells 
inexpensive  articles  and  whose  commissions  never  can 
run  very  high.  In  this  class  are  most  of  the  canvassers 
of  the  house-to-house  type — the  men  that  are  hired  by 
the  hundreds  to  pull  door  bells,  the  men  who  should 


•The  first  half  of  this  eection  was  prepared  by  Frank  E.  Fehlman,  president  of 
the  Churchill-Hall  Company,  New  York  City,  and  a  sales  manager  of  long,  success, 
ful  emperience. 

45 

Copyright,  1921,  by 

by  A.  W.  SHAW  COMPANY 

as  a  part  of  the  Shaw  Selling  Seriea 


46  BUILDING  UP  A  SALES  FORCE 

really  be  classed  as  unskilled,  casual  laborers.  This 
class,  generally  speaking,  includes  all  seasonal  forces  or 
squads  that  are  taken  on  solely  on  commission,  or  with 
very  slight  expense  advances,  and  who  are  not  ex- 
pected to  ''stick."  If  they  sell,  well  and  good;  if  they 
do  not  sell,  they  drop  out  automatically. 

The  chief  duty  of  the  sales  manager  is  to  keep  a 
sufficient  supply  of  men  going  the  rounds,  and  he  is 
as  much  an  employment  man  as  a  sales  manager. 
Even  so,  the  dihgent  and  alert  sales  manager  will  be 
quick  to  find  the  men  of  promise,  and  by  personal 
attention  will  try  to  make  real  salesmen  of  them. 

I  seriously  question  if  it  is  ever  good  business  poUcy 
to  employ  great  numbers  of  salesmen  at  random,  give 
them  the  leads  turned  up  through  advertising,  and  let 
them  loose  upon  the  world  without  more-  ado.  I  ques- 
tion the  economy  of  the  plan  in  the  first  place,  and  in 
the  second  place  its  expediency.  About  half  of  the 
men  employed  with  but  a  cursory  investigation,  take 
their  few  dollars  of  expense  advance  and  never  show 
up  again.  The  other  half  will  sell  with  only  the  com- 
mission in  mind,  and  the  house  they  represent  will  not 
gain  in  reputation  because  they  wdll  tell  any  yarn  to 
customers  that  is  likely  to  bring  a  sale. 

I  have  found  it  more  economical  to  employ  fewer 
and  better  men  over  a  wider  territory,  at  the  same  time 
giving  them  the  supervision  that  they  require.  It  is 
true  that  the  distribution  may  be  somewhat  slower  at 
first,  but  the  sales  field  will  constantly  broaden,  the 
goods  will  stay  sold  better,  and  the  eventual  result 
will  be  far  more  satisfactory.  Of  course,  I  am  speaking 
now  of  the  house  which  really  has  something  to  sell, 
and  a  reputation  to  make  or  to  keep. 

Selling  is  divided  into  two  broad  classes  that  tend 
to  overlap  at  many  points— we  may  call  them  "short 
circuit"  and  ''long  circuit"  selling.  "Short  circuit" 
seUing  we  may  describe  as  the  bringing  to  the  attention 


HANDLING  THE  FORCE  47 

of  the  prospective  buyer  some  article  which  his  aji- 
cestors  probably  used  before  him,  as  soap,  hats,  chairs, 
or  tobacco ;  the  buyer  probably  has  always  used  it  and 
unless  the  design  is  quite  new,  he  needs  to  be  told 
httle  except  the  quality  and  price. 

If  the  design  is  radical  or  the  article  itself  is  abso- 
lutely new,  then  the  prospect  will  become  a  buyer  only 
when  he  is  made  fully  to  understand  its  utility — which 
is  **long  circuit"  selling.  Cash  registers,  calculating 
machines,  electric  cookers,  waterproof  fabrics,  office 
appliances,  and  other  new  or  comparatively  new  offer- 
ings come  under  this  heading. 

DOES  YOUR  TYPE  OF  PRODUCT  REQUIRE  "SHORT  CIRCUIT" 
OR  "LONG  CIRCUIT"  SELLING  METHODS? 

The  first  class  requires  less  selling  skill  than  the 
second,  but  the  articles  in  the  second  class  constantly 
move  up  into  the  first  class  with  the  passage  of  time. 
Then,  again,  the  particular  individual  who  is  to  be 
sold  sometimes  determines  the  classification.  For 
instance,  when  a  clerk  v/ho  has  never  paid  more  than 
$25  for  a  suit  of  clothes  is  offered  one  at  $50,  he  has 
to  be  persuaded  that  the  expensive  clothing  is  some- 
thing more  than  a  covering  for  his  body,  and  that  it 
will  pay  him  in  the  end  to  buy  it.  But  when  the  man 
who  has  been  buying  suits  from  his  tailor  at  $100  is 
offered  a  ready-made  suit  at  $50,  the  sale  falls  under 
the  first  class.  These  examples  are  from  retail  sales- 
manship, of  course,  but  the  analogy  holds. 

In  keeping  salesmen  up  to  the  mark  the  sales  manager 
will  do  well  first  to  classify  the  product  sold.  If  it  is 
in  the  first  class,  the  goods  probably  will  be  the  best 
"salesman"  and  his  principal  thought  will  be  to  see 
that  the  men  make  their  rounds  and  sell  the  quantity 
that  should  be  sold.  In  the  second  class  the  salesmen 
are  more  in  the  nature  of  propagandists.  Primarily 
they  sell  ideas  rather  than  goods.    These  men  usually 


48  BUILDING  UP  A  SALES  FORCE 

need  all  there  is  at  the  sales  manager's  disposal  in 
the  way  of  selling  talk,  enthusiasm,  and  encourage- 
ment, and  they  cannot  sell  to  best  advantage  with- 
out his  close  cooperation. 

There  is  no  hard-and-fast  dividing  line  between  the 
classes,  and  the  get-ahead  sales  manager  will  adapt 
himself  to  the  circumstances  of  each  class  with  both 
the  individual  and  the  territory  in  mind.  Much  that 
has  long  since  passed  into  the  first  class  on  Fifth 
Avenue  or  Michigan  Boulevard  is  still  in  the  propa- 
ganda stage  in  the  small  cities  and  towns. 

To  repeat,  the  problem  largely  is  a  personal  one, 
and  the  sales  manager  who  does  not  know  his  man  and 
the  territory  which  he  is  supposed  to  cover — who  does 
not  know  both  with  the  greatest  intimacy — cannot 
give  worth-while  supervision.  There  are  salesmen  who 
will  look  lip  to  the  manger  and  heed  what  he  says, 
and  there  are  others — including  many  of  the  ''stars" — 
who  will  look  down  on  the  sales  manager  and  take 
what  he  says  with  a  chip  on  the  shoulder.  This  is 
particularly  true  if  the  salesman  happens  to  be  older 
than  the  sales  manager.  And  it  is  then  that  men  of 
this  type  require  the  most  supervision. 

I  well  remember  one  salesman  who  gave  me  a  lot 
of  trouble.  He  was  some  20  years  my  senior  and  a 
college  graduate.  Before  going  on  the  road  he  had 
been  a  teacher.  He  was  a  good  salesman — a  very 
good  one — but  he  did  not  take  to  me  or  to  my  ideas  at 
all.  I  had  introduced  a  training  school  for  retailers 
among  other  steps,  and  this  he  scoffed  at.  He  did  not 
say  much  and  he  did  not  actively  oppose  me,  but  he 
would  not  work  with  me.  He  wanted  to  sell  in  the 
old  way — to  sell  goods  alone — while  I  insisted  on  the 
sales  force  selling  service  and,  through  the  retailer's 
school,  in  a  way,  to  make  each  customer  an  agency. 

He  was  too  good  a  man  to  fire  outright,  although  I 
often  felt  tempted  to.    Instead,  I  decided  that  I  would 


HANDLING  THE  FORCE  49 

prove  to  him  that  my  way  was  right  and  that  he  was 
behind  the  times.  I  proved  it  by  the  men  who  used 
my  methods.  They  began  to  double  and  triple  their 
sales  while  the  old  man  kept  on  at  his  old  level.  He 
found  also,  that  his  customers  who  came  to  our  training 
school  began  to  ask  him  questions  about  selling  that  he 
could  not  answer  from  old  experience. 

I  wrote  him  friendly  letters  from  time  to  time  sug- 
gesting that  he  could  sell  this  or  that  store  more  goods, 
and  incidently  telling  him  what  other  salesmen  were 
doing.  I  never  mentioned  in  these  letters  that  he  was 
falling  down  because  he  had  not  followed  my  course. 
That  would  only  have  made  him  stubborn.  But  when 
I  had  all  my  facts  in  hand — and  it  took  me  a  year  and 
a  half  to  make  sure  that  I  was  ready — I  called  him  in 
from  the  road,  sat  him  down  in  my  office,  and  went  at 
him  without  gloves.  He  could  not  reply  for  I  had  the 
facts.  I  licked  him,  and  every  sales  manager  figura- 
tively will  have  to  lick  a  recalcitrant  salesman  before 
he  gets  his  job  working  right.  Sales  supervision  with 
some  salesmen  is  based  upon  the  intellectual  superior- 
ity of  the  manager,  and  the  manager  sooner  or  later 
must  prove  that  he  has  that  superiority. 

I  say  ''prove"  superiority,  but  I  do  not  mean  that 
he  is  to  assert  it  in  so  many  words,  that  he  is  to  throw 
his  chest  out  and  declaim :  "I  am  it."  The  superiority 
thus  declared  is  just  as  apt  as  not  to  break  up  a  sales 
force  and  put  it  quite  out  of  harmony. 

The  superiority  that  counts  is  the  one  which  is  never 
loudly  asserted,  but  which  the  salesman  feels  and  is 
glad  to  acknowledge,  to  himself  if  not  to  anyone  else. 
And  this  is  only  attained  through  a  close  personal 
study  of  the  man's  work,  and  the  realization  by  him 
that  you  stand  behind  him  and  are  not  only  willing, 
but  have  the  ability  to  help  him.  Sometimes  it  is 
secured  by  "covering  up  "  your  supervision  and  putting 
everything  in  his  hands.     Then  he  will  usually   do 


50  BUILDING  UP  A  SALES  FORCE 

what  you  want  done  out  of  a  sense  of  fairness.  This 
is  usually  the  best  course  to  take  with  the  high-strung 
leaders — for  the  leaders  are  touchy  individuals.  They 
must  be,  or  they  would  not  make  big  sales.  A  cowlike 
selling  force  does  not  bring  in  big  orders. 

Take  one  man  I  know,  for  example.  He  had  sold 
in  Chicago  for  nine  years  on  the  "entertainment "  plan. 
He  had  the  old  idea  that  liquor  furnishes  the  best  of 
selling  arguments,  and  that  a  sale  commonly  came  as 
the  aftermath  of  a  "spree"  with  a  buyer.  His  firm 
let  him  go  on,  because  he  did  turn  in  business  and  it 
had  not  the  nerve  to  try  to  correct  him ;  it  simply  let 
him  ruin  himself.  He  broke  up  all  at  once  and  at  a 
time  when  he  was  earning  over  $6,000  a  year.  I  came 
across  him  after  he  had  been  out  of  work  for  nearly  a 
3^ear  and  a  half.  His  former  mode  of  life  had  not  been 
a  saving  one,  and,  having  a  wife  and  four  children,  he 
was  fairly  on  the  rocks.    He  was  desperate  indeed. 

SOMETIMES  IT'S  DIFFICULT  TO  MAKE  A  MODERN  SALESMAN  OUT 
OF  MATERIAL  LIKE  THIS— BUT  IT  CAN  BE  DONE 

I  investigated  his  record,  found  out  his  habits,  and 
also  that  he  was  at  times  willing  to  take  advantage  of 
his  firm.  But  everyone  agreed  that  he  was  a  good  sales- 
man when  sober.  I  hired  him.  I  gave  him  an  advance 
of  $50  a  week  out  of  which  he  was  to  pay  his  own 
traveling  expenses.  I  knew  he  w^ould  have  no  easy 
time  "getting  by"  on  that  sum  for  traveling,  let  alone 
sending  anything  to  his  family.  I  told  him  that  it 
was  squarely  up  to  him  to  make  good,  and  he  did  make 
good  most  astonishingly.  Within  nine  months  he  had 
opened  up  118  new  accounts.  I  called  him  back  to  the 
office  and  took  him  out  to  dinner.  Gradually  I  steered 
the  conversation  around  to  moral  issues.  I  told  him 
something  which  went  like  this: 

"I  thought  when  you  came  with  us  that  all  you 
needed  was  a  chance  to  show  what  you  could  do  on 


HANDLING  THE  FORCE  51 

your  own  feet.  You  have  made  a  record  that  you 
ought  to  be  proud  of.  I  know  that  I  am  proud  of  it. 
Now,  I  know  you  are  a  square  fellow  and  I  am  going 
to  leave  you  on  youi-  owti  responsibility.  Also,  we  are 
going  to^  pay  you  a  good  salary  in  addition  to  your 
commissions  and  we  will  take  care  of  expenses." 

Now  most  of  the  statement— I  have  condensed  it 
here— was  not  entirely  true.  I  knew  that  he  was  not 
absolutely  square  and  I  had  no  intention  of  leaving 
him  entirely  on  his  own  responsibihty.  But  I  also 
knew  that  he  would  be  square  if  he  felt  that  he  was  on 
his  honor  and  not  supervised.  I  realized  that  if  I  made 
him  feel  that  he  was  directing  himself,  I  could  suggest 
anything  in  reason  to  him  and  he  would  do  it. 

That  man  developed  into  probably  the  best  sales- 
man I  ever  knew.  He  played  the  game  with  absolute 
fairness  and  he  fell  in  with  every  change  that  we  made. 
He  would  even  come  back  to  the  office  hunting  sug- 
gestions for  ways  of  getting  more  business!  Yet,  I 
doubt  if  that  same  man  would  ever  have  taken  an 
order  or  filed  a  report  because  of  a  threat.  He  was 
eager  for  hints  because  he  knew  that  we  wanted  to 
work  with  him— that  our  interest  was  to  better  his  sales. 

I  take  this  as  a  maxim  in  deaUng  with  topnotch 
salesmen:  ''Do  not  issue  orders  as  though  you  were 
a  king.  If  you  have  something  to  say  to  them, 
far  better  put  it  across  in  a  friendly  way  over  the 
luncheon  table  or  in  a  convention  meeting.  Try  to 
manage  so  that  they  will  be  in  the  frame  of  mind  to 
take  sympathetically  what  you  have  to  say  before 
you  have  actually  said  it.  Sell  them  your  propaganda 
and  also  sell  them  yourself.  Then  you  will  not  have 
to  sell  them  the  idea  that  it  all  leads  up  to — they  will 
grasp  it  for  themselves!  You  must  create  a  desire  for 
your  product  before  you  can  make  a  sale.  That  holds 
in  selHng  your  salesmen  as  much  as  in  the  actual  sale 
of  goods." 


52  BUILDING  UP  A  SALES  FORCE 

The  woman  on  the  road  may  offer  an  interesting  and 
timely  digression  at  this  point.  She  offers  a  problem 
to  baffle  any  sales  manager.  If  she  is  worth  while  at 
all,  she  usually  is  three  times  as  temperamental  as 
any  man.  If  she  is  very  successful,  she  often  will 
shortly  try  to  run  you  if  you  attempt  the  painless  sort 
of  supervision  described  previously,  but,  on  the  other 
hand,  sharp  words  almost  always  will  lose  her. 

Then,  too,  women  will  often  do  the  most  unexpected 
things.  While  acting  as  the  sales  manager  for  a  corset 
house  I  had  frequent  applications  from  women  for 
places  on  the  sales  force.  If  they  had  not  had  retail 
selling  experience  I  always  told  them  that  I  would 
hire  them  if  they  spent  three  months  selling  over  the 
counter.  One  day  a  rather  good-looking  young  woman 
asked  to  join  our  force.  I  told  her  the  old  story  about 
first  learning  selling  from  the  retail  side.  She  said 
that  she  would  go  out  and  find  a  job  and  would  be 
back  in  exactly  three  months.  She  left  and  I  never 
expected  to  see  her  again. 

Exactly  three  months  later  a  card  bearing  a  woman's 
name  was  sent  in  to  me.  I  did  not  recognize  the  name 
and  asked  the  clerk  to  find  out  what  she  wanted.  The 
reply  came  back  that  I  had  made  the  appointment 
three  months  before.  It  was  the  would-be  traveler. 
She  had  put  in  her  time  and  was  back  for  the  job. 

We  gave  her  two  weeks  in  the  training  school  and 
sent  her  out  to  cover  Arkansas.  She  was  not  content 
to  travel  comfortably  from  Chicago  to  her  territory. 
The  day  after  she  started  we  got  an  order  from  her  at 
some  station  where  she  had  stopped  off,  and  where  she 
had  no  business  at  all  to  be  selling.  Whenever  she 
got  the  chance,  at  junction  points  and  between  trains, 
she  hunted  up  a  store  and  sold  an  order  of  corsets. 

We  began  to  get  frantic  telegrams  from  our  agents 
asking  by  what  authority  another  was  selling  in  their 
territory,  but  we  could  not  catch  the  "poacher"  by 


HANDLING  THE  FORCE  53 

wire  until  she  had  reached  her  headquarters.  Then  I 
did  my  best  to  inform  her  that  she  was  not  to  sell 
outside  of  her  own  bailiwick,  but  I  must  say  that  I 
never  quite  broke  that  woman  of  the  habit  of  selling 
where  or  when  she  could.  She  simply  refused  to 
comprehend  that  her  field  was  not  the  world. 

When  she  had  been  out  six  weeks  I  had  to  bring  her 
back,  much  to  her  disgust,  to  give  her  further  instruc- 
tion in  wi'iting  out  orders  and  reports.  She  had 
skipped  those  details  in  the  training  course,  and  they 
were  so  simple  that  I  had  not  thought  to  examine  her 
closely  on  them.  And  in  those  six  weeks  she  certainly 
had  managed  to  mess  up  her  orders  in  fine  shape.  But 
how  she  could  sell!  In  her  first  nine  months  she 
opened  87  new  accounts  in  Arkansas — which  is  not  an 
easy  state  in  which  to  sell  high-grade  corsets. 

HERE   ARE   SOME    MIGHTY   GOOD   "TIPS"   ON   HANDLING 
SALESWOMEN  TO  GET  THE  BEST  RESULTS 

She  had  to  have  very  frequent  letters — two  or  three 
a  week — to  keep  her  w^ithin  bounds,  but  they  had  to 
be  carefully  worded  to  avoid  kilUng  the  enthusiasm 
which  made  her  such  a  cracker  jack  saleswoman.  I 
have  found  it  a  good  rule  never  to  reprimand  a  woman 
sharply,  unless  I  am  content  to  have  her  quit.  A 
saleswoman  needs  cheerfulness  in  letters — and  they  do 
not  differ  from  men  in  this  respect.  Nagging  letters 
will  only  cause  sullen  discom-agement  and  antagonism. 

Any  supervision  that  arouses  antagonism — which 
makes  the  salesman  feel  that  the  home  office  is  not 
with  him — is  bad.  Any  supervision  that  creates  and 
keeps  alive  cooperation  is  good.  The  manager  has  a 
double-edged  sword  and  I  hold  that  he  should  wield  it 
meticulously.  A  deal  depends  upon  the  common  sense 
of  the  sales  manager  and  his  knowledge  of  human 
nature  if  he  is  to  be  a  real  help  and  not  merely  a  "  boss  " 
of  the  men  under  him.    Bossing  does  not  get  a  sales 


54  BUILDING  UP  A  SALES  FORCE 

manager  anywhere  in  my  opinion  and  experience, 
although  I  have  seen  some  who  thought  it  did. 

It  is  not  possible  to  reduce  the  whole  subject  of  sales 
supervision  to  a  group  of  numbered  heads,  but  fol- 
lowing are  what  I  consider  the  important  general 
divisions  of  supervision,  and  I  offer  them  with  the 
further  thought  that  they  are  valuable  only  when  used 
with  discrimination.  This  discrimination  will  come  if 
the  sales  manager  makes  it  his  business  to  know  thor- 
oughly all  of  the  territory  and  what  it  should  produce. 

He  ought,  for  instance,  to  know  the  best  seasons, 
the  financial  conditions  from  time  to  time  in  the 
various  sections,  and,  in  short,  be  so  thoroughly  up  on 
his  subject  that  he  will  not  commit  the  fatal  error  of 
asking  a  salesman  to  do  the  impossible.  Nothing  will 
so  quickly  destroy  a  salesman's  confidence  in  his 
manager  as  the  realization  that  the  manager  sometimes 
"talks  through  his  hat."  If  a  manager  is  not  sure  of 
his  ground — so  sure  that  he  can  offer  to  go  out  and 
turn  the  trick  himself — he  had  best  keep  quiet.  Now 
let  us  turn  to  the  divisions. 

1.  Reports.  These  form  the  basis  of  a  considerable 
portion  of  the  manager's  supervision — although  by  no 
means  the  whole  basis — and  they  may  take  many 
different  forms  according  to  the  type  of  the  business. 
But  this  one  point  is  common  to  all  good  reports — 
they  must  have  a  definite  objective.  A  good  report  is 
something  more  than  a  diary  or  a  compendium  of 
excuses.  It  should  aim  to  give  the  sales  manager  the 
information  to  correspond  intelligently  with  the 
customer  sold,  or  even  to  talk  at  length  with  the  buyer 
should  he  drop  in  unexpectedly  at  the  home  office. 

When  a  customer  appears  in  the  offing  with  trouble 
written  all  over  his  face  it  is  well  for  the  manager  to 
have  the  facts  right  at  hand  for  the  adjustment.  I 
have  often  saved  a  perilous  situation  by  having  all  the 
facts  at  my  finger  tips,  and  I  have  made  it  a  rule  never 


DAILY  SALES  REPORT. 

CitKlnmnt 


Corsot  ordar 

Brassiere  order 

Grand  toUl 

For  Delivery 

If  new  account  indicate  with  X  and  give  rolorences  or  names  , — , 
of  several  concerns  now  extending  them  credit  terms.         1 1 

At  Once 

Future 

Total 

Merchandise  manager. 


-Advertising  manager. 


What  individuals  did  you  interview?. 

Who  reads  the  Corsetiere? 

Are  fittings  featured? 

Is  she  a  graduate? 


.When  will  Corsetiere  attend  our  school?. 
(s  corset  department  well  located? 


Has  stock  prominent  place?. 


Name  all  corset  lines  carried 
1                                                 4 

1 

Name  brassiere  lines  earned 

1 

2                                                5 

2 

2 

3                                         6 

J 

3 

Corset  Models  Stocked 

Brassiere  Models  Stocked            | 

Model 
No. 

Quant, 
ity 

Model 
No. 

Quant- 
ity 

Model 
No. 

Quant- 
ity 

Model 
No. 

Quant- 
ity 

Model 
No. 

Quant- 
ify 

Model 
No. 

Quant- 
ity 

Model 
No. 

Quant- 
ity 

About  what  proportion  of  itieir  brassiere  business  do  we  receive? - 
What  is  your  plan  for  increasing  J** 


What  efforts  have  you  made  to  open  additionalbrassiere  accounts?. 

How  often  do  they  advertise  our  morrhanrtign? 

Have  they  a  "repeat  sales"  follownjp? 


Indicate  which  of  the  following  advertising  helps  are  being  used—— ^ 

,—,                        r-i        Window   ,—,,—,,—,—,  Medical     _^ 

Folders  l_J Manikins  l—J Posters    LI Cuts    Ul Slides    I    I  Siqim    LJ Booklets    LJ 

Have  you  explained  the  best  methods  of  folder  disfrihutinn? 


Figure  8:  This  comprehensive  sales  report  is  sent  into  the  sales 
manager  of  one  concern  by  the  salesman  or  saleswoman  after  every 
call.  In  this  way  a  complete  record  is  kept  on  sales  to  each  customer. 
This  report  also  checks  up  fully  on  the  dealer's  advertising  activities. 

55 


56  BUILDING  UP  A  SALES  FORCE 

to  see  a  customer  without  first  having  quickly  run  over 
the  account  and  the  reports  of  the  salesmen.  If  the 
visitor  has  not  a  ''kick"  with  him,  the  manager's 
acquaintance  with  the  account  pleases  him,  and  if  he 
has  a  ''kick"  it  certainly  is  easier  to  adjust  with  the 
facts  than  without  them,  you  will  agree. 

The  exact  form  of  the  reports  is  largely  a  matter  of 
individual  preference.  They  should  contain  headings 
for  all  the  facts  that  the  manager  wants  to  know, 
therefore  they  will  vary  with  the  individual  manager 
and  business.  I  found  the  form  shown  in  Figure  8 
very  satisfactory  and  it  can  be  modified  to  fit  almost 
any  type  of  business.  I  think  it  is  quite  as  elaborate 
as  a  salesman  should  be  asked  to  fill  out. 

It  is  extremely  difficult  to  get  reports  out  of  first- 
class  salesmen,  I  have  found.  They  can  be  induced 
to  return  the  simpler  forms,  but  they  spurn  voluminous 
records  of  their  doings.  The  sales  manager  has  to 
"sell"  his  report  to  them.  He  has  to  overcome  the 
feeling  that  the  reports  have  no  end  beyond  keeping 
tab  on  the  salesman's  movements — he  must  convince 
that  reports  help  the  men  on  the  road  to  make  sales. 

It  is  hard  to  down  opposition  on  this  score  and  the 
manager  needs  all  possible  tact.  I  recall  one  concern 
which  employed  14  men  and  sold  largely  to  farmers. 
I  put  in  a  reporting  system  for  it.  Instantly  the  older 
men  scented  spy  work.  At  first  they  would  not  send 
in  reports  at  all,  and  when  I  insisted  they  began  to 
fake  them.  Since  they  visited  farmers  they  could 
seldom  work  on  rainy  days,  and  had  then  to  kill  time 
in  country  stores  and  hotels.  But  "sat  in  a  chair  all 
day  and  smoked"  does  not  look  well  on  a  report  for 
the  home  office.    So  they  faked  rainy-weather  reports. 

It  struck  me  from  an  examination  of  the  daily  forms 
that  the  country  must  be  all  dried  up — for  never  did 
I  find  a  drop  of  rain  in  them!  I  looked  up  the  weather- 
bureau  records,  and  they  told  a  different  story.    Then 


HANDLING  THE  FORCE  57 

I  pointed  out  to  the  salesmen  in  a  series  of  letters  that 
they  were  not  to  blame  for  rainy  days  and  that  the 
time  could  well  be  spent  in  talking  to  prospects  who 
came  into  town.  I  suggested  that  it  would  be  wiser 
to  stay  in  town  on  rainy  days.  I  did  not  say  a  word  to 
let  them  know  that  I  had  run  down  the  fakes,  but  they 
were  quick  enough  to  ''get  me."  The  weather,  from 
the  salesmen's  reports,  got  worse,  but  the  sales 
picked  up  in  way  to  surprise  you! 

HERE  IS  A  REPORT  SITUATION  YOU  MUST  EXPECT.    BUT 
IT  IS  NOT  LIKELY  TO  ANNOY  A  GREAT  WHILE 

One  must  expect  salesmen  to  doctor  their  reports  in 
the  beginning.  But  that  course  is  a  short  one.  They 
soon  grow  tired  of  ''kidding"  themselves,  and  get 
around  to  telling  the  whole  truth — because  it  is  so 
much  easier.  When  they  reach  that  point  the  report 
usually  becomes  a  real  benefit  to  the  man  making  it,  for 
it  causes  him  to  reflect  upon  how  he  has  passed  the  day, 
and  reflection  is  at  the  bottom  of  most  improvement. 

2.  Letters.  The  number  of  letters  that  a  sales 
manager  should  send  out  to  his  men  is  fixed  by  the 
temperament  of  the  individuals,  except  with  certain 
routine  circular  announcements,  as  on  prices. 

My  only  guide  in  writing  a  letter  is  what  I  would 
say  to  the  salesman  if  he  w^ere  in  my  office.  No  manager 
would  think  of  reefing  off  a  set  speech  to  a  man  sitting 
across  his  desk — regardless  of  the  temperament  of  that 
man — so  why  put  letters  on  a  different  footing?  That 
is  the  reason  I  do  not  believe  in  form  letters  or  any  other 
sort  of  letter  which  is  too  general  in  its  terms.  You 
have  the  salesman's  report  before  you  and  that  is  the 
basis  on  which  the  letter  is  to  be  founded.  If  the  sales 
have  been  good,  tell  the  man  so,  and  if  they  are  falfing 
off  try  to  find  out  what  is  the  trouble — but  always  in 
a  nice  way,  if  best  results  are  to  be  secured.  This  last 
is  the  important  part  of  letter  writing,  I  believe. 


58  BUILDING  UP  A  SALES  FORCE 

It  is  easy  for  the  manager  to  dash  off  a  curt  repri- 
mand, but  the  result  is  more  apt  to  be  a  discourage- 
ment than  an  incentive.  I  would  rather  send  out  a 
barrel  of  sunshine,  at  the  one  time,  letting  the  man 
know  that  sales  are  below  par,  but  expressing  my  com- 
plete confidence  that  he  will  bring  them  up.  Probably 
the  real  reason  for  the  slump  is  that  the  salesman  is 
out  of  sorts  with  himself,  and  the  best  step  that  the 
manager  can  take  is  to  try  to  bring  back  his  confidence. 

One  morning  I  received  this  telegram  from  a  sales- 
man in  Michigan : 

Expect  to  return  to  Chicago  tomorrow. 
Shall  I  bring  samples  with  me? 

I  wired  back : 

Special-delivery  letter  written  today. 
Wait  until  it  arrives.  Don't  try  to  sell. 
Have  a  good  time  while  you  wait. 

The  trouble  with  this  salesman  was  that  he  had 
expected  to  open  up  about  50  new  accounts  in  a  ter- 
ritory that  had  been  very  poorly  handled  by  three 
preceding  salesmen.  Everywhere  he  went  the  store 
owners  would  say :  ''Well,  you're  the  f  oiurth  new  sales- 
man to  call  on  me  in  18  months.  I  wonder  who  the 
next  one  will  be,  and  what  he  will  say?" 

He  was  taking  orders  right  along  but  being  treated 
as  a  joke  "got  on"  his  nerves  and  he  was  ready  to  quit. 
Up  to  that  time  he  had  opened  up  18  new  accounts. 
Some  of  them  were  very  small  but  others  showed 
evidence  of  becoming  live  and  profitable.  I  told  him 
that  his  record  for  opening  new  accounts  was  the  best 
we  had  on  our  books  for  the  state  and  that  the  satis- 
faction of  calling  on  these  same  accounts  six  months 
later  would  be  worth  the  price  of  the  laughs  the 
Michigan  customers  then  had  on  him. 

This  salesman  spent  a  year  and  a  half  in  the  territory, 
opened  up  over  60  new  accounts,  and  when  he  left  he 


HANDLING  THE  FORCE  59 

received  many  letters  from  the  trade,  telling  how 
impressed  they  had  been  with  his  stick-to-it-iveness 
and  with  his  ability  to  straighten  out  the  previous 
rather  sloppy  reputation  of  the  house. 

I  am  a  believer  in  telegrams  and  I  never  hesitate  to 
use  the  wire  when  a  salesman's  feelings  are  at  stake. 
A  cheerful,  warm,  and  cordial  night  letter  often  will 
start  a  man  off  100%  encouraged  in  the  morning, 
regardless  of  the  weather  or  his  previous  day's  failures. 

3.  Personal  Contact.  If  letters  dio  not  effect  an 
improvement,  the  sales  manager  may  either  call  the 
''falhng  down"  salesman  into  the  home  office,  or, 
better  yet,  go  out  on  the  road  with  him  and  find  out  at 
first  hand  just  what  the  trouble  is.  It  compliments 
the  salesman  to  have  the  manager  journey  out  to  see 
him,  and  he  is  glad  to  introduce  him  to  his  customers. 
Also,  it  helps  business  for  the  customers  to  feel  that 
their  accounts  are  so  esteemed  that  the  manager  him- 
self calls  on  them.  These  calls  buck  up  the  salesman 
and,  although  best  made  in  a  friendly  way  as  though 
selUng  were  not  the  object,  will  often  pull  in  good-sized 
orders.  They  help  the  salesman  too,  in  finding  his  way 
to  that  class  of  buyers  v/ho  feel  their  importance. 

It  is  a  curious  commentary  upon  our  retailing  meth- 
ods that  many  buyers  are  not  buyers  at  all,  but  men 
who  have  been  "heaved"  into  buying  because  of 
selling  ability.  They  sometimes  do  not  know  their 
business  and  they  conceal  this  lack  of  knowledge  by 
being  brusk  and  overbearing.  Sometimes  they  will  try 
to  frighten  salesmen  by  yelling  at  them.  I  try  to  teach 
my  men  to  sit  quietly  by  and  let  the  buyer  yell  his 
head  off  if  that  diversion  pleases  him.  Then,  when  he 
has  all  of  the  "rough  stuff"  out  of  his  system,  or  finds 
that  he  must  come  up  for  air,  to  go  ahead  and  sell  him. 

A  demonstration  of  accurate  know^ledge  by  a  sales- 
man will  soon  put  this  class  of  buyer  in  a  receptive 
mood,  but  he  fnust  first  be  allowed  to  have  his  httle 


60  BUILDING  UP  A  SALES  FORCE 

season  of  disorder.  If  the  salesman  cannot  overcome 
the  buyer's  arrogance,  probably  the  sales  manager  can, 
for  the  buyer  "usually  will  know  that  the  manager 
draws  down  a  bigger  salary  than  he  does;  and  it  is 
comparative  salaries  that  regulate  the  bearing  of  these 
chaps.  The  knowledge  of  the  buyer  can  safely  be  taken 
in  inverse  ratio  to  his  rudeness,  as  a  general  rule. 

When  the  manager  does  come  in  contact  with  the 
salesman,  either  in  the  office  or  the  field,  I  find  that  the 
"sunshine"  course  brings  the  best  results.  Tell  him 
that  he  cannot  fail  and  explain  why.  Tell  him  that 
the  company  and  all  of  its  money  is  at  his  disposal  if 
he  makes  good.  Talk  along  this  line  will  help  him. 
Then,  if  you  can  point  out  where  and  why  he  has 
fallen  down — but  in  a  constructive  and  not  a  nagging 
way — you  will  leave  a  salesman  full  of  enthusiasm  and 
determined  to  go  back  hard  at  the  game. 

WHY  SELLING  TALKS  AND  METHODS  TO  BE  EFFECTIVE 
MUST  BE  TIED  UP  WITH  A  POTENT  PERSONAL  APPEAL 

Jf..  Selling  Talks  and  Methods.  When  men  are  long 
away  from  personal  contact  with  the  manager  they 
may  and  often  do  become  careless  in  their  approaches 
and  selling  talks  and  these  need  to  be  watched  care- 
fully. If  a  man  is  not  using  all  the  tools  that  you  give 
him,  he  is  not  getting  the  utmost  out  of  his  job.  That 
is  the  way  to  put  it  up  to  him — that  the  talk  is  to  help 
him  to  make  more  money.  Nothing  is  effective  with 
a  salesman  who  does  not  have  as  his  end  the  earning 
of  greater  commissions.  The  dollar  mark  may  never 
be  left  out  with  success,  I  have  found. 

6.  Contests.  The  awakening  of  the  spirit  of  com- 
petition through  contests  speeds  up  sales  as  will 
nothing  else — provided  always  that  they  are  not  used 
too  often.  I  favor  prizes,  but  not  in  cash.  Cash  arouses 
the  idea  that  the  company  ought  to  give  larger  com- 
missions anyway,  while  jewelry,  articles  for  the  sales- 


HANDLING  THE  FORCE  61 

man's  home,  and  other  tokens  do  not  touch  this  point 
and,  in  addition,  they  are  constant  reminders  of  past 
success  which  may  be  of  considerable  help  in  times  of 
discouragements  when  sales  are  slow  and  few. 

Frequent  contests  lose  their  value.  Once,  or  at  the 
most  twice  a  year  is  quite  enough.  It  is  of  help,  how- 
ever, to  print  the  leaders  in  sales  each  month  in  the 
house  organ.  Leadership  in  gross  sales  is  a  question 
of  territory  rather  than  of  the  individual,  and  a  rating 
based  on  percentage  of  sales  with  respect  to  oppor- 
tunity often  is  fairer  than  the  gross  business  rating. 
Or  both  plans  may  be  used  and  two  lists  published. 
The  trouble  is  that  a  man  selling  in  New  York  City 
perhaps  could  easily  lead  the  gross  sales  month  after 
month  without,  as  a  matter  of  fact,  getting  nearly  all 
that  he  should  out  of  his  territory. 

6.  Conventions.  I  think  that  every  member  of  the 
selling  force  should  meet  with  the  executives  at  the 
home  office  in  a  convention  at  least  once  a  year.  This 
plan  brings  up  the  morale  and  also  permits  the  "put- 
ting over"  of  new  selling  points.  The  salesmen  should 
know  exactly  how  all  articles  are  made  and  they  should 
know  at  first  hand  every  improvement  in  manufacture. 

There  is,  of  course,  a  social  side  to  conventions  but 
business  should  predominate.  The  skilful  manager  can, 
however,  make  the  sessions  so  interesting  and  so  sand- 
wiched in  with  social  events  that  the  business  flavor 
will  not  be  too  prominent.  A  great  editorial  writer 
was  once  asked  why  he  permitted  comic  cartoons  on 
the  same  page  with  his  editorials.  He  answered:  "It 
is  sometimes  necessary  to  rap  on  the  sides  of  the  bath- 
tub wihile  giving  the  baby  a  bath."  And  that,  I  think, 
is  nearly  the  formula  for  the  successful  convention — 
amuse  the  salesmen  or  you  will  never  have  the  chance 
to  teach  them  anything. 

7.  Remvneration  and  Expenses.  Here  is  an  easy 
lAafie  for  the  manager  to  fall  into  trouble.     The  salary, 


62  BUILDING  UP  A  SALES  FORCE 

commissions,  and  expense  accounts  of  the  salesmen 
often  are  constant  worry  spots.  I  take  the  view  that 
the  laborer  is  worthy  of  his  hire,  and  I  will  not  consent 
to  rigid  expense  limiting  or  commission  cutting  of  men 
who  are  making  money  for  the  company.  There  is  a 
limit,  and  if  demands  are  unreasonable  the  salesman 
can  be  shown.  Put  all  your  cards  on  the  table,  let  him 
know  what  the  company  makes  on  sales,  and  convince 
him  that  he  is  getting  his  fair  share.  If  he  is  not 
getting  a  fair  share,  see  that  he  does  get  it  or  resign 
yourself.  No  sales  manager  can  keep  his  self-respect 
when  he  knows  that  he  is  hired  to  flimflam  the  men. 

I  am  not  an  advocate  of  small  expense  accounts.  I 
do  not  want  a  man  to  divide  his  time  between  saving 
expenses  and  selling.  If  he  is  worth  sending  out  at  all, 
he  is  worth  sending  out  right.  I  want  a  salesman  to  be 
well  dressed,  to  get  his  clothing  pressed  frequently  at 
the  expense  of  the  company,  and  generally  to  spare  no 
reasonable  cost  that  will  aid  in  keeping  up  his  ''pep." 
I  travel  with  my  eyes  not  on  the  expense  but  on  the 
results ;  that  is  the  viewpoint  I  want  from  the  m.en  who 
are  working  with  me.  Of  course,  some  men  will  try  to 
pad  their  accounts,  but  I  find  this  usually  is  true  only 
when  a  manager  is  overcritical  on  petty  items. 

For  instance,  I  know  of  one  house  that  will  not  pay 
for  Pullman  seats.  But  all  the  salesmen  ride  in  Pull- 
mans just  the  same,  and  the  company  foots  the  bill — 
but  it  does  not  know  that  it  is  buying  Pullmans,  for 
the  accounts  come  in  camouflaged.  Wliy  encourage 
such  petty  deceit?  A  salesman  who  goes  comfortably 
to  a  town  in  a  Pullman  will  do  better  work  than  one 
who  rides  jammed  into  a  crowded  day-coach. 

A  scheme  which  some  firms  use  is  to  make  a  sched\ile 
allowing  a  certain  amount  a  day  for  different  classes 
of  towns  and  cities.  They  calculate  what  it  should  cost 
a  man  to  live  well  in  cities  of  the  first  class,  of  the 
second,  and  so  on.     Then  the  man  turns  in  his  expense 


HANDLING  THE  FORCE  63 

account  with  the  actual  railroad  fares  paid,  and  he  ir> 
allowed  expenses  on  the  proper  per  diem  schedule,  a 
copy  of  which  is  in  his  possession.  If  he  spends  more 
than  the  allowance  it  comes  out  of  his  pocket  unless 
he  can  give  a  good  reason ;  if  he  spends  less  he  is  that 
much  ahead.  Some  companies  have  found  this  plan 
to  work  well,  and  to  average  up  to  the  satisfaction  of 
both  the  salesman  and  the  company.  It  has  the 
advantage  of  avoiding  disputes,  at  any  rate. 

Then,  too,  some  salesmen  do  not  know  how  to  travel 
to  the  best  advantage.  When  this  is  true,  the  routes 
should  be  laid  out  ahead — this  plan  is  nearly  always 
necessary  with  M^omen — and  explicit  directions  given 
about  trains  and  hotels.  I  am  not  one  of  those  who 
take  the  view  that  when  one  strikes  a  town,  the  time 
of  the  train  out  should  be  forgotten.  On  the  contrary, 
I  think  that  a  salesman  should  map  out  his  day  with 
reference  to  the  trains,  and  should  change  his  schedule 
only  if  he  finds  that  he  will  make  more  sales  by  staying. 
However,  this  is  a  very  different  attitude  from  making 
catching  the  train  out  the  main  feature  of  the  day. 
It  is  better  expressed  as  "Know  what  you  are  going 
to  do — then  do  it  as  well  as  you  know  how." 

I  hold  that  true  supervision  is  constructive  and  has 
little  to  do  with  faultfinding.  But,  in  addition  to 
helping  the  man  to  make  sales  through  supervision, 
there  is  a  great  deal  of  what  has  been  called  ''behind 
the  line"  selling  that  is  entirely  the  manager's  affair. 
One  could  not  expect  to  reap  a  harvest  from  an  un- 
sown field.  Neither  should  one  expect  to  make  sales 
in  an  unprepared  market.  It  is  up  to  the  company 
through  the  sales  manager  to  give  service  to  the 
prospective  buyer,  to  impress  him  through  adver- 
tising, through  proffered  helps  in  his  own  business,  as 
the  training  of  his  retail  salesmen  in  a  "service  school," 
and  the  like,  and  through  every  other  means  possible 
to  prepare  the  way  ahead  of  the  salesman. 


64  BUILDING  UP  A  SALES  FORCE 

"Behind  the  Hne"  seUing  is  really  a  part  of  the 
handling  of  salesmen,  although  it  is  an  entire  and  a  big 
subject  in  itself.  For,  if  the  man  does  not  absolutely 
know  that  you  are  doing  all  in  your  power  to  help  him, 
he  will  not  return  to  you  that  keen  enthusiasm  and 
loyalty  without  which  so  very  little  can  be  done. 

To  close,  in  the  main,  handling  salesmen  can  be 
most  satisfactorily  accomplished  if  the  manager  has 
dignity  and  yet  is  friendly,  matches  fairness  with 
firmness  when  necessary,  and  always  keeps  his  men 
pointed  in  the  right  direction  toward  the  big  goal — 
increased  sales. 


PUTTING  SALESMEN  IN  THE  RIGHT  FIELD 

Y  reassigning  sales  territories  each  year,  one 
eastern  manufacturer  has  developed  his  organ- 
ization to  meet  the  demands  of  a  growing  busi- 
ness, has  kept  his  salesmen  satisfied,  and  has  reduced 
his  cost  of  selling  by  keeping  each  sales  territory 
covered  effectively  at  all  times. 

This  concern  has  organized  the  United  States  into 
seven  districts,  each  in  charge  of  a  district  manager. 
A  district  contains  from  three  to  five  territories,  with  a 
sales  manager  for  each.  The  question  of  assigning  or 
reassigning  territories  is  one  of  the  most  important 
questions  taken  up  at  the  annual  meeting  of  the  district 
managers  and  sales  managers  with  the  higher  company 
officials.  Previous  to  the  meeting  each  manager  has 
talked  with  his  salesmen  about  their  territories  and 
has  decided  on  the  chj^nges  which  seem  necessary.  He 
also  has  consulted  with  his  district  manager. 

At  the  annual  meeting  each  district  manager  pre- 
sents his  recommendations  for  assigning  territories  for 
the  coming  year.  These  usually  are  approved  unless  the 
heads  of  the  business  suggest  a  different  arrangement. 

Sometimes  salesmen  are  transferred  from  one  part 
of  a  territory  to  another  and  sometimes  they  are 
transferred  to  another  territory  or  even  to  another 
district.  Sales  and  district  managers  also  are  called 
into  conference  three  or  four  times  during  the  year 
and  if  changes  in  the  original  territorial  arrangement 
seem  necessary  they  are  made. 

21 


22  BUILDING  UP  A  SALES  FORCE 

In  laying  out  and  assigning  territories  the  ease  in 
transportation  for  both  salesmen  and  product  is  the 
first  point  taken  into  consideration.  Local  conditions, 
the  class  of  population,  and  the  ability  of  the  salesman, 
are  other  determining  factors. 

''This  systematic  consideration  of  territories  has 
done  much  to  make  our  sales  organization  more  ef- 
fective," said  the  sales  manager  of  this  company. 
"By  making  readjustments  as  soon  as  there  is  any  need 
for  change  we  keep  our  salesmen  contented  because 
they  feel  we  are  trying  to  give  them  the  best  possible 
working  conditions.  We  try  hard  all  the  time  to  reduce 
the  size  of  each  salesman's  territory  as  rapidly  as 
possible,  in  order  to  give  him  a  better  chance  for 
intensive  cultivation  of  prospects." 

This  policy  shows  how  a  successful  concern  meets  one 
of  the  most  difficult  problems  sales  managers  have  to 
face.  The  constant  growth  in  population,  its  shifting, 
and  the  rapid  development  of  new  territories  makes  it 
necessary  to  keep  a  close  watch  on  the  sales  field  to 
insure  effective  distributions. 

Investigation  indicates  that  the  four  chief  questions 
manufacturers  and  wholesalers  have  to  face  in  meeting 
this  problem  are: 

1.  On  what  plan  shall  our  territories  be  assigned? 

2.  How  shall  we  make  sure  we  place  the  right  sales- 
men in  each  territory? 

3.  What  is  the  most  effective  method  of  organizing 
the  territories  and  routing  the  men? 

4.  How  best  can  we  keep  each  salesman  satisfied 
and  enthusiastic  about  his  territory? 

The  most  common  method  of  deciding  the  first  of 
these  questions — on  what  basis  shall  the  territory  be 
assigned — is,  of  com-se,  to  use  already -laid -down 
geographical  boundaries —  a  state  or  a  group  of  states. 
Investigation     indicates,    however,     that    there    are 


PLACING  SALESMEN  RIGHT  23 

several  other  successful  methods,  among  them  that  of 
territories  based  on  sales  possibilities,  and  of  territories 
limited  only  by  a  classification  of  prospects  by  lines. 

One  manufacturer,  for  example,  puts  accessibiUty 
ahead  of  everything  else  in  deciding  upon  territories. 

''Our  territories  are  assigned  to  salesmen  on  the 
basis  of  immediate  accessibiUty,"  says  the  sales 
manager  of  this  concern.  "Since  we  are  engaged  in 
rapid-fire  propositions  which  require  quick  deliveries, 
it  is  necessary  that  our  salesmen  make  favorable  im- 
pressions on  our  customers  by  prompt  handling  of  all 
inquiries.  This  prompt  handling  of  inquiries  has  been 
our  most  effective  method  of  reducing  sales  costs." 

HERE'S    AN    EFFECTIVE    TERRITORY    ARRANGEMENT 
WHICH  HAS  HELPED  SALES  GROW  FOR  ONE  CONCERN 

Another  concern  arranges  its  territories  according  to 
convenience  of  branch  offices,  accessibility,  and  logical 
markets.  Branch  offices  in  each  territory  are  in  charge 
of  salaried  managers.  In  other  parts  of  the  country  all 
selling  is  done  tlu-ough  agencies  on  a  coromission  basis. 

Up  to  three  years  ago  another  company  had  no  fixed 
territories  for  its  salesmen.  Each  man  was  allowed  to 
go  wherever  he  could  get  orders.  Then  it  was  decided 
to  establish  definite  territories  on  the  basis  of  sales. 
That  is,  customers  were  assigned  to  salesmen  in  such 
a  manner  that  each  man  had  about  an  equal  volume  of 
business.  In  assigning  the  territories,  local  and  geo- 
graphical conditions  also  were  taken  into  consideration. 

Still  another  concern  has  found  it  wise  to  apportion 
all  territories  on  the  basis  of  classes  of  trade,  instead  of 
assignments  based  on  geographical  districts.  This  is 
especially  applicable  to  city  territories,  of  course. 

In  working  out  this  plan,  lists  of  prospective  cus- 
tomers first  were  obtained.  These  were  divided  into 
lines  of  business,  as  furniture  dealers,  real  estate  men, 
grocers,  jewelers,  and  so  on.    The  concern's  plan  was 


24  BUILDING  UP  A  SALES  FORCE 

based  on  the  fact  that  every  salesman  knows  some  one 
particular  business  better  than  any  other. 

A  blank  form  was  sent  to  each  member  of  the  sales 
force,  containing  questions  as:  In  what  other  lines  of 
business  than  this  have  you  worked?  What  particular 
line  of  business  do  you  know  best?  Would  you  like  to 
sell  to  this  line  exclusively? — and  so  on. 

These  blanks,  as  filled  in  by  the  salesmen,  were  used 
as  a  basis  for  the  readjustment  of  territories.  Instead 
of  restricting  a  man's  territory  by  street  boundaries,  it 
is  now  divided  by  trades.  Thus,  John  Cowley,  who  at 
one  time  sold  real  estate,  is  given  a  list  of  real  estate 
men  to  call  upon;  Fred  Thompson,  who  formerly 
clerked  in  a  grocery  store,  is  allotted  a  "territory" 
consisting  of  a  list  of  grocers ;  and  so  on.  A  list  of  several 
hundred  prospective  customers  in  a  line  he  knows 
comprises  the  salesman's  "territory." 

By  thus  placing  its  men  at  work  among  the  type  of 
men  to  which  they  are  already  accustomed,  this  con- 
cern has  greatly  increased  the  effectiveness  of  its 
sales  force.  Men  who  were  already  good  producers 
have  made  higher  sales  records  under  the  new  plan, 
and  several  men  who  were  about  to  be  dropped  from 
the  force  on  account  of  their  inabihty  to  produce  a 
sufficient  amount  of  business,  quickly  developed  into 
more  than  usually  successful  salesmen. 

One  instance  in  particular  shows  the  successful 
operation  of  this  method.  A  young  fellow  who  had 
come  to  Chicago  from  a  small  Wisconsin  town  was 
given  a  territory  that  comprised  part  of  the  downtown 
district.  He  worked  conscientiously  and  averaged 
eight  calls  a  day — good  work  for  any  salesman  in  this 
hne.  But  not  many  sales  resulted  from  his  efforts. 
Apparently  his  lack  of  acquaintance  with  the  city  and 
its  business  ways  was  responsible  for  his  lack  of  suc- 
cess. He  already  had  notice  to  quit  when  the  new 
method   of   allotting   territories   was   decided   upon. 


PLACING  SALESMEN  RIGHT  27 

Investigation  of  his  business  experience  revealed  that 
before  coming  to  Chicago  he  had  spent  four  years  in 
his  father's  furniture  factory,  and  that  he  had  a  close 
knowledge  of  the  furniture  industry. 

He  was  given  another  trial  under  the  new  plan. 
This  time  his  "territory"  consisted,  not  of  blocks  of 
buildings  with  mixed  classes  of  possible  customers, 
but  of  a  list  of  300  furniture  dealers  and  factories 
within  the  city  limits. 

Eager  and  confident,  placed  among  the  class  of  people 
he  was  famihar  with,  he  set  to  work  with  a  will.  With- 
in a  month  he  had  five  sales  to  his  credit,  and  he  now 
ranks  with  the  firm's  biggest  money-making  salesmen, 
and  his  sales  are  growing  every  day. 

While  this  plan  of  territory  division  obviously  re- 
duces the  number  of  calls  a  salesman  can  make  each 
day,  owing  to  the  scattered  location  of  his  prospects, 
yet  the  increased  efficiency  that  results  from  adapting 
the  salesman  to  his  customer  is  declared  to  more  than 
offset  this  disadvantage.  Five  selected  calls  a  day, 
it  is  said,  will  often  produce  more  business  than  10 
or  more  haphazard  calls. 

Sometimes,  however,  it  is  possible  to  fit  the  salesman 
to  the  class  of  prospects  he  knows,  without  also  com- 
pelling him  to  scatter  his  efforts  over  a  wide  area.  The 
tendency  for  similar  lines  of  business  to  congregate 
in  one  district  often  can  be  utilized  by  the  sales  manager 
for  this  purpose.  Fortunately  this  concentration  of 
allied  business  is  almost  universal.  In  New  York  City, 
for  example,  engineering  interests  are  with  few  ex- 
ceptions confined  to  the  environs  of  Liberty  Street; 
financial  interests  gather  on  Wall  Street;  theatrical 
near  Broadway  and  Forty-second  Street;  wholesale 
dry  goods  on  lower  Broadway,  and  so  on.  Take  any 
town  or  city  in  the  country,  and  you  will  find  that  in 
much  the  same  way  each  line  of  commercial  endeavor 
has  its  own  particular  district. 


28  BUILDING  UP  A  SALES  FORCE 

This  concentration  of  effort  is  gained  in  another  wa;y 
by  a  concern  which  continues  to  divide  its  territories  on 
geographical  lines.  This  firm — it  sells  a  specialty  of 
general  appeal — sends  its  salesmen  lists  of  prospects 
classified  by  lines  of  business.  The  salesmen  are  in- 
structed to  concentrate  on  a  given  trade  during  a 
certain  month.  For  example,  August  will  be  "grocers' 
month" ;  September,  "  dry  goods  dealers'  month" ;  and 
so  on  throughout  the  year. 

YOU'LL   AGREE   THAT   THE    RESULTS   SECURED   BY   THIS 
METHOD  JUSTIFY  ITS  TRIAL  BY  MANY  CONCERNS 

This  method  is  reported  to  have  many  advantages; 
the  principal  one  is  that  it  limits  salesmen  to  a' certain 
number  of  prospects  for  the  period,  and  thus  makes 
them  concentrate  their  efforts.  Experience  has  shown 
this  firm  that  a  month's  concentrated  effort  on  20 
prospects,  all  of  whom  are  in  the  same  line  of  business, 
will  normally  produce  more  sales  than  efforts  scattered 
over  50  or  even  100  prospects  in  different  lines. 

This  concentration  upon  given  trades  also  has  the 
effect  of  making  the  salesman's  task  easier.  Suppose 
that  under  the  old  plan  he  selects  a  certain  street  for 
his  day's  operations,  and  calls  on  stores,  one  after  the 
other,  in  regular  order.  The  first  prospect  may  be  a 
butcher;  the  second  a  grocer;  then  a  stationer,  barber, 
dry-goods  proprietor,  and  so  on.  Each  prospect  re- 
quires a  different  appeal.  Arguments  that  induce  a 
grocer  to  buy  are  likely  to  prove  futile  on  a  barber, 
and  this  plan  avoids  waste  of  this  sort. 

By  concentrating  on  one  line  of  business  at  a  time  the 
salesman  can,  in  the  main,  use  one  definite  method  of 
approach  and  demonstration.  His  mind  is  not  con- 
fused by  a  mass  of  arguments  for  all  trades,  but  is 
devoted  exclusively,  say,  to  grocery  arguments  and 
instances  of  how  other  grocers  under  similar  conditions 
have  used  his  appliance  to  advantage. 


PLACING  SALESMEN  RIGHT  29 

Each  month,  when  informing  its  salesmen  that  the 
following  four  weeks  are  to  be  devoted  to  grocers,  or 
dry  goods  dealere,  or  whatever  line  the  approach  is 
planned  to  interest,  the  firm  sends  to  all  of  its  salesmen 
a  printed  resum^  of  selling  methods  that  have  produced 
especially  good  results  from  the  line  to  be  dealt  with. 
This  resume  gives  the  salesman  a  full  hne  of  seUing 
ammunition,  and  posts  him  on  the  best  points  of  appeal 
to  the  trade  he  is  to  call  on. 

This  brings  us  to  the  second  question  we  enumerated 
on  page  22 — how  are  we  going  to  place  the  salesman 
in  the  territory  to  which  he  is  best  suited? 

One  wholesale  concern  overcomes  this  difficulty 
mainly  by  hiring  only  men  who  are  natives  of  the  ter- 
ritory in  which  they  are  to  work.  For  example,  if  the 
Texas  territory  is  vacant,  the  company  tries  to  get  a 
Texan  for  the  job.  By  so  doing  it  usually  gets  a  man 
who  is  familiar  with  the  habits  and  customs  of  the 
people  he  is  to  deal  with  and  who  knows  how  to  get 
about  the  territory  quickly. 

"A  salesman  who  makes  a  complete  failure  in  one 
territory  often  will  become  a  star  producer  when  trans- 
ferred to  another  district,"  says  the  head  of  one  con- 
cern. ''Likewise,  a  successful  salesman  may  drop  into 
the  ranks  of  the  mediocre  or  poor  producers  when 
moved  to  another  ground.  The  principal  reason  for 
this  is  the  fact  that  for  a  salesman  to  produce  the 
highest  results  he  must  deal  with  customers  of  a  type 
of  mind  similar  to  his  own. 

"Every  fine  of  business  develops  a  distinct  type  of 
mind,  one  which  views  all  questions  from  its  own 
particular  angle.  The  manufacturer,  retailer,  jobber, 
publisher,  and  real  estate  man — each  has  his  own 
viewpoint.  An  idea  which  arouses  intense  interest  in 
the  manufacturer  or  wholesaler  oftentimes  is  looked 
upon  by  the  retailer  as  having  nothing  of  value  for  him. 
It  is  difficult  to  change  this  view,  too. 


30  BUILDING  UP  A  SALES  FORCE 

"A  salesman  accustomed  to  dealing  with  the  pro- 
moter's enthusiastic  type  of  mind,  therefore,  is  ob- 
viously at  a  disadvantage  when  set  to  work  in  a  ter- 
ritory in  which  the  engineer's  cold,  calculating  thought 
processes  predominate  to  any  extent. 

''History  cites  many  instances  where  epoch-making 
battles  were  won  solely  through  the  successful  general's 
knowledge  of  the  enemies'  ground — resulting  in  fore- 
knowledge of  their  actions.  Big  commercial  battles — 
the  making  of  sales  in  particular — are  often  won  by 
forecasting  the  prospect's  probable  thoughts  and 
actions,  and  adopting  the  method  of  salesmanship  logi- 
cally best  suited  to  them." 

Working  with  this  fact  in  mind,  sales  managers  of 
successful  organizations  have  found  that  a  close  study 
of  the  salesman  in  relation  to  his  territory  is  really  as 
important  as  a  study  of  the  goods  and  their  points  of 
appeal.  They  seek  to  eliminate  guesswoTk  as  far  as 
possible,  in  allotting  a  territory  to  a  salesman.  They 
predetermine  the  thought  plane  of  the  various  members 
of  the  sales  force  and  the  occupants  of  various  ter- 
ritories, and  then  reorganize  their  force  for  better  sales 
results  by  setting  each  salesman  to  work  in  a  territory 
where  the  general  plane  is  similar  to  his  own.  In  in- 
stances where  they  have  not,  results  have  been  bad. 

The  lack  of  sales  success  which  often  results  where 
this  is  not  done,  is  aptly  illustrated  by  an  experience 
of  the  sales  manager  for  a  New  York  specialty  concern. 
The  lead  in  this  particular  experience  was  played  by 
Corbin,  one  of  his  salesmen. 

"Corbin  walked  into  my  office  one  day,"  says  this 
sales  manager,  "and  applied  for  a  job.  He  had  sold 
books,  insurance,  and,  latest,  electric  signs  for  retail 
stores.  It  seemed  to  me  that  his  experience  should  have 
equipped  him  to  sell  our  bookkeeping  system  to  store- 
keepers, and  I  took  him  on.  One  of  our  best  territories 
— upper  Broadway — was  vacant,  and  he  got  it. 


PLACING  SALESMEN  RIGHT  31 

"A  month  passed  and  Corbin's  one  small  sale  seemed 
to  mark  him  as  unsuited  to  our  business.  I  had  a 
heart-to-heart  talk  with  him  to  try  to  discover  his 
weak  points,  but  without  avail.  I  finally  decided  to 
put  in  a  day  with  him,  working  in  his  territory,  to 
show  him  the  knack  of  selling  our  hne. 

"A  stationer  was  the  first  man  we  called  on.  I  in- 
troduced myself  and  started  the  conversation;  then 
I  turned  it  over  to  Corbin.  I  wanted  to  see  at  first- 
hand how  he  handled  a  prospect. 

"From  the  very  start  I  noticed  that  he  seemed  to 
lack  confidence;  was  defensive  rather  than  aggressive, 
and  failed  utterly  in  presenting  the  merits  of  our  system. 

ALTHOUGH    THIS    SALESMAN    COULDN'T    SELL    TO    SOME 
PROSPECTS.  HE  WAS  A  WIZARD  WITH  HIS  OWN  CLASS 

''We  made  three  more  calls;  at  a  dry  goods  store,  a 
restaurant,  and  a  shoe  store.  In  each  Corbin  appeared 
confused — he  lacked  confidence  and  failed  to  make  an 
impression.  I  did  not  interrupt  him ;  I  was  out  to  size 
up  Corbin — not  to  sell  goods. 

''Passing  through  a  side  street  on  our  way  back  to 
the  office,  Corbin  interrupted  my  conversation  with: 
'Let's  try  this  grocery  store.' 

"In  we  went,  as  Corbin  wished.  He  took  the  lead. 
He  made  a  skilful  approach  and  got  the  grocer  inter- 
ested to  the  point  of  asking  questions  about  the  system. 
And  when  a  prospect  gets  to  that  stage,  he's  mighty 
near  buying,  salesmen  will  agree. 

"But  what  interested  me  most  was  Corbin.  He  was 
a  changed  man.  His  seUing  talk  was  a  masterpiece; 
his  every  word  rang  true;  bashfulness  was  replaced  by 
absolute  confidence  in  himself.  Well,  to  make  it  short, 
Corbin  landed  the  order — took  it  in  a  matter-of-fact 
way,  quite  different  from  what  I  expected. 

"On  our  way  back  to  the  office,  Corbin  broke  in  on 
my  congratulatory  remarks.   'It's  easy  to  sell  that  type 


32  BUILDING  UP  A  SALES  FORCE 

of  man,'  he  said.  'If  I  had  a  territory  full  of  stores 
like  that,  I'd  make  big  sales.' 

"Then  I  saw  a  light.  Corbin  was  unaccustomed  to 
calling  on  high-grade  trade  such  as  we  met  on  Broad- 
way. The  type  of  man  there  was  strange  to  him,  and 
did  not  respond  to  his  regular  methods  of  approach. 
But  the  small,  side-street  grocer  was  typical  of  the 
class  that  Corbin  was  accustomed  to  deal  with.  He 
knew  that  man's  habit  of  thought — the  angle  from 
which  he  viewed  things. 

''Well,  I  transferred  Corbin — gave  him  a  Sixth 
Avenue  territory,  full  of  small,  medium-class  stores. 
The  first  week  his  sales  amounted  to  $250.  Today  he 
stands  second  on  our  sales  rating." 

In  a  high-class  territory,  Corbin  proved  a  failure; 
he  was  out  of  his  element.  But  with  medium-class 
trade  to  deal  with  he  proved  a  record-breaker,  because 
his  prospective  customers  were  of  his  own  type  of 
mentahty,  and  had  a  similar  point  of  view. 

In  another  concern,  a  grocery  house,  the  resignation 
of  a  salesman  left  the  firm  with  a  vacant  territory. 
This  firm  dealt  with  two  classes  of  trade;  first,  dis- 
tributors who  sold  to  retailers  in  outlying  districts; 
and  second,  retailers  in  large  cities. 

Customers  in  the  vacant  territory  consisted  largely 
of  one-man  grocery  stores.  It  meant  a  dead  loss  to 
leave  the  territory  vacant.  So,  calling  in  Burton,  a 
wholesale  salesman,  the  general  manager  explained 
the  situation  and  asked  him  to  divide  his  time  between 
his  wholesale  territory  and  the  retail  territory. 

Four  days  later,  Burton  entered  the  general  man- 
ager's ofRce,  his  woe-begone  expression  showing  plainly 
that  something  was  wrong. 

"I  can't  do  business  with  those  little  stores,"  he 
exclaimed;  "I  thought  I  was  a  good  salesman,  but 
they're  beyond  me.  They  don't  seem  to  'open  up' ; 
I've  tried  the  'glad  hand,'  and  so  on,  but  it's  no  use." 


PLACING  SALESMEN  RIGHT  33 

Here  was  an  instance  where  the  man  used  to  the 
mentahty  of  men  in  big  concerns,  could  not  get  the 
attitude  of  the  small  tradesman.  Both  of  these  men, 
Corbin  and  Burton,  were  good  salesmen — among  the 
men  they  were  used  to.  Corbin  could  no  more  "talk 
up"  to  a  high-class  trade  than  Burton  could  "talk 
down"  to  a  smaller  class  trade  than  he  had  been 
accustomed  to  deal  with. 

Similar  instances  can  be  found  in  every  sales  force. 
A  salesman  who  is  unfitted  for  the  territory  he  is  in, 
may  produce  a  fair  amount  of  business  by  schooling 
himself  to  overcome  this  initial  handicap;  but,  placed 
in  a  territory  for  which  he  is  naturally  fitted,  he  usually 
will  produce  far  bigger  business. 

A  Chicago  sales  manager  on  a  visit  to  Tampa, 
Florida,  became  acquainted  with  a  southerner  who 
had  made  a  big  record  selling  life  insurance.  By  the 
offer  of  a  larger  salary  the  southerner  was  induced  to 
go  to  Chicago  to  take  up  the  sale  of  a  line  of  crackers. 

Two  months  in  a  Chicago  territory  and  the  south- 
erner admitted  failure.  "I  can't  do  business  with 
northerners,"  he  said,  with  a  touch  of  regret:  "Can't 
get  them  to  listen  to  me;  and  then,  they  want  to  do 
business  in  such  a  rush.  I  guess  I'd  better  go  back  to 
Tampa  w^here  I'm  a  proved  success." 

Experience  had  shown  this  sales  manager  that  a 
man  who  makes  a  flat  failure  in  one  territory  often 
will  roll  up  a  big  record  in  another.  He  had,  to  some 
extent,  discovered  the  reason.  Prompted  by  this,  he 
said  to  the  wavering  southerner:  "How  would  you 
like  to  go  to  Boston?  Different  class  of  people  than  in 
Chicago;  in  some  ways  their  habits  resemble  those  of 
the  South.  They  don't  do  business  as  quickly  as  we 
do  in  Chicago — more  like  the  people  you  know." 

The  southerner  moved  to  Boston.  Eight  days  later 
the  sales  manager  received  a  letter  from  him,  in  the 
course  of  which  he  said: 


34  BUILDING  UP  A  SALES  FORCE 

"The  people  here  do  think  and  act  differently  than 
do  you  in  the  Middle  West.  They  don't  try  to  get  48 
hours  out  of  every  day.  In  lots  of  ways  Boston  reminds 
me  of  the  South.  I  get  on  well  with  the  people.  I'll 
stick  here  because  I'm  going  to  'make  good.'  The 
$200  order  enclosed  is  just  a  hint  of  what  is  to  follow." 

In  selling  to  professional  men,  some  concerns  have 
solved  sales  problems  by  employing  as  salesmen,  men 
who  have  belonged  to  the  same  profession.  A  St. 
Louis  firm  catering  to  trade  of  this  sort  has  found  by 
experience  that  in  its  business,  a  professional  man, 
although  green  as  regards  business  and  salesmanship, 
often  will  make  more  sales  than  its  "star"  salesman. 

While  this  does  not  hold  true  in  every  instance,  yet 
it  proves  the  value  of  adapting  the  salesman's  type  of 
mind  to  that  of  the  customer.  Similar  types  of  mind 
come  quickly  to  an  understanding  and  work  in  har- 
mony, while  different  types  work  along  divergent  lines 
and  generally  fail  to  find  any  meeting  point. 

With  the  right  salesmen  selected  for  each  territory 
the  third  question  which  faces  the  sales  manager  is 
how  to  arrange  for  the  salesmen  to  cover  ground  to  the 
best  advantage,  and  to  organize  territories  for  the  most 
effective  all  around  handling. 

YOU  WILL  HAVE  TO  ANSWER  THIS  VITAL  QUESTION   IF 
YOU  GET  THE  BEST  FROM  YOUR  SALES  FORCE 

By  putting  its  salesmen  on  a  definite  time  schedule, 
one  grocery  concern  was  able  to  increase  sales  more  than 
50%.  To  do  this  the  company  hired  a  railroad  man 
who  was  thoroughly  familiar  with  railroad  schedules 
to  help  plan  the  salesman's  routes. 

First,  the  number  of  grocery  stores  in  each  town  to  be 
visited  was  determined.  Then  a  certain  amount  of 
time  was  allowed  for  each  call.  This  was  based  on 
the  experience  of  the  salesmen.  After  the  total  time 
necessary  in  each  town  had  been  estimated  the  rail- 


PLACING  SALESMEN  RIGHT  35 

road  man  figured  olit  the  most  advantageous  schedule. 
Then  each  man  tried  out  the  schedule  for  about  two 
months  and  the  adjustments  which  seemed  necessary 
were  made.  If  the  salesman  got  off  schedule  there- 
after, he  had  to  report  the  reason  to  the  sales  man- 
ager by  letter — and  good  reasons  were  required. 

In  working  out  the  new  schedule  it  was  found  that 
many  towns  of  less  than  500  in  population  had  never 
been  touched.  Many  of  these  towns  were  in  rich 
farming  districts.  The  sales  manager  and  the  railroad 
man  revised  the  routes  so  most  of  the  little  towns  were 
included  and  yet  it  did  not  take  any  salesman  any 
longer  to  cover  his  route. 

In  a  firm  selling  specialties  to  machine  shops  the 
word  "territory"  was  done  away  with  entirely  and 
the  word  "route"  substituted.  For  example,  a  sales- 
man instead  of  having  Tennessee  and  Kentucky  for 
his  territory  would  have  Routes  14,  15,  26,  and  28. 
If  an  inquiry  came  in  from  a  town  on  Route  37  the 
sales  manager  would  telegraph  to  a  salesman  to  see 
the  prospect  and  then  continue  to  cover  Route  37. 
These  routes  were  worked  out  carefully. 

To  get  rid  of  the  trouble  of  fixing  train  schedules  one 
concern  has  arranged  its  territories  so  that  each  sales- 
man can  work  from  a  central  base  and  cover  his 
entire  field  by  automobile.  This  concern  has  found  that 
this  method  is  cheaper  and  that  the  salesmen  work 
the  territories  more  thoroughly  because  they  do  not 
feel  obUged  to  rush  calls  in  order  to  catch  trains. 

Another  company  has  worked  out  a  somewhat 
similar  plan.  It  arranges  its  territories  so  the  men  have 
about  two  weeks  in  the  central  base  city  and  two  weeks 
outside.  This  enables  them  to  have  their  homes  in 
pleasant  localities  and  does  not  require  their  being 
away  on  too  long  trips.  The  men  prefer  the  plan  and 
results  have  shown  it  is  far  less  expensive  than  "shoot- 
ing" men  around  the  country  in  a  more  or  less  haphaz- 


36  BUILDING  UP  A  SALES  FORCE 

ard  way.  This  consideration  for  the  men  also  has  done 
much  to  foster  a  spirit  of  company  loyalty, 

A  shoe  manufacturer  endeavors  to  work  each  ter- 
ritory intensively  and  for  this  purpose  he  has  tried  to 
eliminate  long  jumps  from  one  part  of  the  country  to 
another.  To  aid  in  this  he  tries  to  persuade  each 
salesman  to  live  near  the  center  of  his  territory. 

In  organizing  territories  for  most  effective  selhng 
one  house  has  appointed  one  southern  and  three  west- 
ern managers  for  the  territories  in  these  districts. 
These  managers  do  no  selling  themselves  but  are 
responsible  for  the  sales  in  the  territory.  They  do  not 
have  the  power  to  hire  or  fire  salesmen,  but  any  sug- 
gestions which  they  make  usually  are  followed  out  by 
the  sales  manager,  who  feels  it  necessary  to  back  his 
managers  up  to  preserve  discipline.  Only  under  special 
circumstances  is  a  salesman  transferred  to  another 
territory,  except  through  these  district  managers. 

Incidentally,  the  salesmen  for  this  house  are  required 
to  handle  only  such  lines  as  they  think  will  sell  in 
their  districts.  It  is  up  to  the  department  manager  in 
the  factory  to  sell  his  goods  to  the  salesmen  if  he  wants 
to  make  a  good  record.  By  this  system  no  salesman 
is  compelled  to  carry  a  line  he  does  not  have  con- 
fidence in.  When  this  selective  system  was  put  into 
operation  it  cut  the  number  of  trunks  carried  by  one 
salesman  in  the  Northwest  from  three  to  one.  Upon 
going  over  the  goods  carefully  it  was  found  that  for 
climatic  or  other  reasons  two  thirds  of  the  line  was  un- 
suitable to  this  territory.  The  salesman  increased  his 
sales  by  being  able  to  concentrate  on  suitable  lines. 

While  its  sales  territories  are  fairly  well  defined  thi^ 
company  believes  in  sending  two  or  three  men  into  a 
town  if  it  appears  necessary  to  do  it  to  get  all  the 
business  there  is  to  be  secured  there. 

As  an  illustration  of  how  this  works  out,  the  sales 
manager  told  of  an  incident  which  occurred  recently. 


PLACING  SALESMEN  RIGHT  37 

One  of  the  senior  partners  of  the  firm,  a  man  who  had 
nothing  to  do  with  the  sales,  visited  a  small  Iowa  town. 

At  the  hotel  where  he  stopped  he  was  surprised  to 
find  three  of  the  company's  salesmen — one  of  them  a 
division  manager — registered.  Each  salesman  was 
displaying  the  same  line  of  goods  but  in  different  rooms. 

The  partner  was  astounded.  When  he  returned  he 
ran  to  the  sales  manager  and  asked  him  if  he  knew 
that  these  three  salesmen  were  displaying  the  same 
goods  in  the  same  town  at  the  same  time.  The  sales 
manager  replied  that  he  didn't  know  it,  but  that  it 
was  entirely  probable,  for  each  one  of  these  men  had 
customers  there  whose  accounts  were  large  enough  to 
make  it  worth  while  to  visit  the  town,  and  he  knew 
that  one  salesman  could  not  sell  all  three  customers 
because  it  had  been  tried  the  year  before  and  two  of 
the  accounts  had  been  lost  temporarily.  The  partner 
was  soon  convinced  of  the  wisdom  of  the  poUcy. 

"IT  KEEPS  THE  MEN  ON  THEIR  TOES,"  SAYS  THE  SALES 
MANAGER  BEHIND  THIS  TESTED  PLAN 

''This  scheme  of  having  two  of  three  men  in  one 
town  helps  to  keep  the  salesmen  on  their  toes,"  ex- 
plained this  sales  manager.  "A  little  inside  competi>. 
tion  often  is  a  good  stimulus.  For  instance,  the  man 
visiting  Waterloo,  Iowa,  may  not  be  selling  the  line  to 
Adams,  who  logically  is  a  good  prospect.  We  instruct 
our  man  at  Fort  Dodge  to  go  over  the  next  week  and 
try  to  sell  Adams.  If  he  does,  the  account  is  his.  In 
the  same  way  the  Waterloo  man  may  be  sent  to  Fort 
Dodge.  The  knowledge  that  he  may  lose  a  good 
account  keeps  each  man  working  his  hardest  to  get 
all  he  can  out  of  the  territory." 

On  one  occasion  the  district  manager  for  the  state 
of  Texas  reported  that  all  the  merchants  had  bought 
all  they  would  for  the  season  and  that  it  would  be 
economy  to  call  the  salesmen  in.  But  the  sales  manager 


38  BUILDING  UP  A  SALES  FORCE 

believed  more  goods  could  be  sold  in  Texas.  After 
consulting  with  the  manager  he  sent  one  salesman  a 
trunkful  of  overalls  with  instructions  to  spend  three 
weeks  in  the  territory  with  nothing  but  this  line. 

In  three  weeks'  time  this  man  had  sold  his  overalls 
to  the  amount  of  $6,900  worth. 

"I  would  have  been  satisfied  if  he  had  sold  $1,000 
worth  a  week,"  said  the  sales  manager,  ''especially  at 
that  season  of  the  year — but  he  sold  $2,300.  He  had 
only  one  line,  he  knew  he  had  to  sell  it,  and  he  did." 

One  sales  manager  keeps  track  of  his  salesmen  by 
a  series  of  racks  and  cards.  When  the  salesman 
starts  on  the  road,  narrow  strips  of  cardboard  bearing 
the  names  of  the  towns  the  salesman  will  cover  are 
placed  in  the  lower  racks. 

As  soon  as  the  salesman  reports  each  town,  the 
cards  are  moved  to  the  upper  rack.  Calls  are  indicated 
by  white  cards  where  sales  are  made  and  by  red  cards 
where  no  sales  are  made.  By  using  this  system  the 
sales  manager  can  sit  at  his  desk  and  see  at  a  glance 
just  how  much  of  his  route  each  man  has  covered  and 
what  results  are  developing. 

In  the  chart  (Figure  7)  is  a  diagram  showing  how 
the  sales  force  of  one  food-products  concern  is  organized 
to  meet  conditions  in  its  territories.  Branch  managers, 
each  with  an  assistant,  are  in  charge  of  districts.  Each 
territory  is  in  charge  of  a  head  salesman  who  has 
salesmen  and  advertising  service  men  under  him. 

This  territory  organization  holds  except  where  very 
large  cities  in  a  territory  complicate  the  organization. 
For  example,  at  the  right  of  the  chart  is  the  organ- 
ization for  the  Chicago  territory.  It  will  be  noted  that 
an  assistant  manager  has  charge  of  the  city  field  and 
that  a  head  salesman  is  in  charge  of  each  of  the  out- 
lying territories.  This  form  differs  slightly  from  the 
regular  organization  shown  on  the  left,  in  that  the 
head  salesmen  come  directly  under  the  branch  manager. 


HOME    OFFICE 


Branch 
Manager 


Branch 
Manager 


Branch 
Manager 


Assistant 
Manager 


Head 


Branch 
JVlanager 


Branch 
Manager 


Head  Salesmen 


Salesmen 


Outlying  Territory 


Assistant 
Manager 


Advertising 

and 
Service  Men 


Variable  Number  of 
Salesmen 


£ 


Salesmen 


Head  Salesmen  Chicago 

pop 

)  Territory     | 


□  □ 


Salesmen 


& 


Figure  7:  The  flexibility  of  one  nationally  known  sales  organization 
is  shown  in  this  chart.  At  the  left  is  shown  the  standard  branch-office 
sales  organization;  at  the  right  are  indicated  the  variations  in  organiza- 
tion due  to  the  special  conditions  in  and  surrounding  a  large  city. 

39 


40  BUILDING  UP  A  SALES  FORCE 

With  the  territories  laid  out,  the  men  assigned  to 
their  territories  and  the  entire  field  organized  for  the 
most  effective  handhng,  the  fourth  question  we  enumer- 
ated— how  to  keep  the  salesmen  satisfied  with  their 
territory — comes  up  for  consideration. 

It  is  but  natural  for  a  salesman  to  think  that  his 
territory  is  harder  to  work  than  the  other  fellow's; 
that  if  he  were  only  over  in  the  next  territory  he  could 
beat  all  records,  and  so  on. 

Here  is  the  plan  which  one  concern  used  to  compare 
the  seUing  possibilities  of  several  adjacent  territories. 
It  is  especially  useful  in  determining  the  value  of 
territories  in  a  large  city  and  may  readily  be  modified 
to  apply  to  almost  any  concern's  problems. 

The  sales  force  of  this  concern  is  composed  of  14 
men,  each  in  charge  of  a  territory  in  the  same  district. 
Some  of  the  salesmen  complained  that  their  territories 
were  not  as  good  as  some  of  the  others.  The  company 
determined  to  find  out.  It  laid  out  a  plan. 

Twice  during  its  "find  out"  campaign  the  entire 
selling  force  was  concentrated  in  each  man's  territory 
for  the  two  hours  between  3  and  5  o'clock  in  the 
afternoon.  To  avoid  showing  partiality  the  names  of 
the  salesmen  were  di'awn  from  a  box  and  the  territo- 
ries worked  in  the  order  drawn. 

This  plan  gave  each  salesman  a  chance  to  work  in 
every  territory.  It  also  led  the  salesmen  to  study  their 
own  territories  more  carefully  because  each  man  laid 
out  the  work  for  the  other  representatives  when  they 
came  into  his  district.  Thus  it  gave  each  man  a  chance 
to  show  his  ability  to  map  out  a  selling  campaign. 

This  concern  manufactures  a  varied  line  of  gas 
appliances.  On  the  day  previous  to  the  group  seUing, 
which  has  just  been  described,  a  boy  distributed 
literature  from  house  to  house  showing  the  use  of  the 
various  articles.  It  gave  the  householder  prospects  a 
chance  to  study  them. 


PLACING  SALESMEN  RIGHT  41 

The  earnings  of  the  entire  force  during  the  period 
spent  in  any  one  man's  territory  were  pooled  and  the 
sum  given  to  the  man  whose  district  was  worked. 

Under  this  plan  each  man  had  a  chance  to  show 
what  he  could  do  in  the  other  man's  territory.  Also,  it 
gave  the  company  an  accurate  comparative  record  of 
the  various  territories,  for  the  same  men  had  worked 
the  same  territories  for  the  same  length  of  time. 
Further,  it  gave  a  good  check  on  the  abilities  of  the 
various  salesmen,  for  after  each  one  had  the  same 
opportunities  in  the  same  territories  his  total  sales 
formed  an  accurate  record  of  his  worth.  This  plan 
gave  the  company  a  more  logical  basis  for  establish- 
ing quotas.  Needless  to  say,  the  green  fields  of  the 
other  man's  territory  didn't  look  so  green  after  this 
contest  was  over.  It  was  a  long  time  before  there 
were  requests  for  transfer  from  this  sales  force. 

WHY  ONE  SALES  MANAGER  ALWAYS  PAYS  CLOSE  ATTENTION  TO 
SALESMEN'S  COMPLAINTS  ABOUT  TERRITORIES 

Instead  of  looking  at  a  salesman's  complaint  ''that 
his  territory  is  too  small"  as  a  chronic  grievance,  one 
sales  manager  makes  a  special  point  of  treating  each 
complaint  as  an  individual  prolDlem  to  be  worked  out. 
He  goes  on  the  theory  that  if  a  salesman  makes  a 
complaint  he  probably  has  thought  about  it  until  it 
has  become  a  very  real  trouble  with  hhn. 

This  man  has  tabulated  every  town  in  each  territory 
which  has  two  or  more  rated  dealers  who  might  handle 
the  goods.  Towns  in  which  dealers  are  established  are 
indicated  by  crosses.  These  lists  are  done  up  in  pack- 
ages, one  for  each  salesman. 

With  this  material  at  hand  the  sales  manager  is 
ready  for  the  salesman's  comi)laint.  He  tells  him  he 
may  be  right  and  that  he  will  go  over  the  territory 
with  him.  The  sales  manager,  we  will  say,  is  then  able 
to  point  out  that  there  are  35  towns  in  Green  County 


42  BUILDING  UP  A  SALES  FORCE 

having  more  than  two  rated  merchants  and  that  there- 
fore the  company  should  have  at  least  35  dealers  in 
that  county  instead  of  the  four  it  actually  has.  He 
suggests  that  the  salesman  spend  a  couple  of  weeks 
opening  new  towns  in  this  county.  Or  he  may  point 
out  that  another  county  has  84  big  towns,  but  the 
company  only  nine  dealers,  and  so  on. 

After  a  short  session  along  this  line,  the  salesman 
usually  finds  that  the  territory  he  thought  too  small 
has  possibilities  he  did  not  suppose  existed.  And  he 
goes  back  to  his  work  with  a  new  idea  of  his  field,  and 
this  new  idea  translates  into  new  sales. 

Another  sales  manager  now  meets  complaints  by  a 
systematic  changing  of  territories  at  regular  intervals. 

"Sooner  or  later,"  he  says,  ''any  man  will  tell  me 
that  his  gi'ound  is  'worked  out.'  To  allow  only  two 
men  to  change  territories  under  such  conditions  makes 
the  rest  of  the  force  dissatisfied.  My  plan  now  is  to 
change  all  territories  about  every  six  months.  Here's 
the  way  it  works  out: 

''We  divide  Boston  into  20  territories.  By  keeping 
20  salesmen  on  the  move  we  get  the  utmost  from 
each  territory,  for  it  is  certain  that  normally  each  man 
will  appeal  to  a  different  class  of  prospect  than  his 
predecessor.  In  this  way,  we  make  the  whole  of  each 
territory  produce — not  simply  the  part  of  it  easily 
worked  by  one  type  of  salesman. 

"There  is  an  added  advantage,  too,  in  frequent 
change.  It  prevents  a  salesman  from  getting  the  stale- 
ness  that  is  liable  to  come  from  too  great  famiharity 
with  his  territory.  There  is  a  certain  fascination  about 
a  new  territory  which  keeps  a  man  keyed  up,  and 
this  enthusiasm  is  a  very  vital  part  of  a  salesman's 
mental  equipment,  I  have  found." 

The  same  reasoning  has  shown  another  concern  that 
it  does  not  pay  to  allow  a  salesman  to  occupy  one 
territory  for  too  long  a  time. 


PLACING  SALESMEN  RIGHT  43 

One  day  one  of  its  salesmen  walked  into  the  New 
York  office  of  the  sales  manager.  His  territory  con- 
sisted of  an  eastern  section  of  Massachusetts. 

*'My  territory  is  'worked  out,'"  he  complained. 
"I've  sold  every  man  who  can  be  sold.  I  guess  I'll 
have  to  quit  unless  you  can  give  me  another  territory." 

At  that  time  all  of  the  concern's  territories  were 
filled.  But  the  sales  manager  remembered  that  one 
of  the  Maine  salesmen  also  was  complaining  that  his 
territory  was  'worked  out,'  and  wanted  a  change. 

Within  a  week  the  two  men  had  exchanged  territo- 
ries. Like  the  horse  that  can  find  no  good  feed  on  his 
own  part  of  the  meadow  and  persists  in  craning  his 
neck  over  the  fence  to  nibble  grass  from  the  next  field, 
each  salesman  thought  the  other's  territory  better  than 
his  own.  And  so  both  men  were  pleased  at  the  change. 

"A  remarkable  event  soon  happened,"  said  the  sales 
manager.  ''Both  'worked -out'  territories  began  to 
produce  good  results.  The  reason  is  not  far  to  seek. 
No  one  man  can  make  an  equally  strong  appeal  to 
all  classes.  Following  the  line  of  least  resistance  he 
works  on  prospects  that  his  nature  and  training  fit 
him  to  deal  with  easiest.  Others — not  of  his  type — 
he  condemns  as  impossible. 

"The  two  territories  were  not  'worked  out'  by  any 
means,  but  only  the  particular  class  of  prospects  with 
which  each  man  could  deal  most  advantageously. 
And  the  other  prospects  were  'impossible'  only  from 
the  individual  salesman's  standpoint;  not  by  any 
means  from  the  firm's  point  of  view." 

This  sales  manager  says  that  in  making  territory 
changes  of  this  sort  his  rule  is  to  transfer  men  of  widely 
different  temperaments,  so  that  the  new  territory  to 
which  each  man  goes  may  offer  the  widest  scope  for 
his  efforts.  -  Obviously,  the  change  would  not  be  so 
beneficial  were  men  of  similar  temperaments  to  be 
allowed  to  exchange  territories. 


44  BUILDING  UP  A  SALES  FORCE 

These  examples  go  to  show  how  wide-awake  concerns 
ke.ep  their  men  satisfied  with  the  territories  which  have 
been  selected  for  th-em  after  a  careful  study  of  their 
qualification  for  the  field.  We  also  have  seen  how  the 
boundaries  of  territories  are  effectively  determined, 
and  how  they  are  organized  to  get  the  best  results  at 
the  least  cost.  When  this  is  done  two-thirds  of  the 
way  toward  bigger  sales  has  been  won. 


TOURING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbolize  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  Pubhca- 
tions  are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  knew 
so  well  during  the  war. 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
of  thm  A.  W.  SHAW  COMPANY 


SECTION  5 

What  About  Salesmen's  Reports? 


WHAT  ABOUT  SALESMEN'S  REPORTS? 

SHALL  we  ask  our  salesmen  to  spend  valuable 
time  every  day  making  out  reports  on  expenses, 
sales,  calls,  customers'  business,  credits,  and 
so  forth,  or  shall  we  be  satisfied  with  orders,  and  let 
them  speak  for  the  salesman?  If  we  do  ask  for  reports, 
how  shall  we  use  them  to  help  future  sales  and  how 
can  we  make  salesmen  realize  their  value?* 

These  questions  and  others  that  bear  on  the  effective 
recording  of  sales  and  expenses  by  salesmen  are  prob- 
lems which  every  manufacturer  and  wholesaler  has 
difficulty  in  solving.  Investigation  indicates  that 
business  men  constantly  are  on  the  lookout  for  plans 
which  will  give  them  the  desired  information  without 
burdening  the  man  on  the  road  with  too  much  clerical 
detail.  Reports  from  salesmen  are  generally  desired, 
investigation  indicates,  on:  (1)  expense,  (2)  sales, 
and,  (3)  prospects  and  customers. 

In  considering  the  first — expense  accounts — the 
problem  which  every  wholesaler  and  manufacturer 
has  to  decide  is:  Shall  I  check  expense  reports  closely 
and  question  small  items  at  the  risk  of  offending  sales- 
men, or  shall  I  consider  merely  the  total  expense  and 
not  bother  about  the  details?  The  following  incident 
illustrates  the  two  extremes  in  policy  which  prevail: 


♦  This  seotion  is  intended  to  indicate  the  general  policies  which  govern  the  obtain- 
ing of  sales  information,  and  the  type  of  reports  used  by  many  sales  managers, 
'i  he  uae  made  of  the  information  after  it  is  obtained  is  discussed  in  these  sectiona. 

1 

Copyright,  1921,  by 

A.  W.  SHAW  COMPANY 

as  a  part  of  the  Shaw  Selling  Series 


2  BOOSTING  THE  SALES  VOLUME 

Two  salesmen  were  sitting  in  a  railroad  station 
when  one  of  them  remarked  that  he  had  forgotten 
what  his  ticket  cost  the  last  jump,  and  that  he  would 
have  to  look  it  up.  The  other  salesman  jokingly 
asked  if  he  could  not  guess  it  high  enough. 

*' Guess,"  replied  the  first.  "It's  a  slim  chance  I 
have  to  do  any  guessing.  If  I  put  it  down  at  $2 
when  it  was  only  $1.98  I'd  get  a  letter  by  return  mail 
saying  that  the  other  2  cents  had  been  deducted  from 
my  expense  allowance.  I  think  my  house  must  have 
the  passenger  rates  of  every  railroad  in  the  country 
and  a  corps  of  clerks  to  check  up  every  report. 

The  second  salesman  expressed  surprise  that  expense 
accounts  should  be  watched  so  closely. 

"  Listen,"  said  the  first  salesman,  as  he  pulled  a  letter 
from  his  pocket.  "Up  in  Chesterton — of  course, 
that's  not  the  real  name  of  the  place,  but  it  will  serve — 
I've  a  good  many  customers  scattered  around  in  the 
outskirts.  It  takes  some  tall  hustling  to  get  to  them 
all  in  one  day.  Last  week  when  I  was  there  I  got  out 
early.  It  was  below  zero,  too,  but  by  digging  in  hard 
all  day  I  covered  them  all  and  got  a  darned  nice  lot 
of  business,  too.  I  wrote  it  all  up  that  night  with  a 
good  deal  of  satisfaction  and  sent  it  in  to  the  officCj 
together  with  my  weekly  expense  account.  Now, 
listen  what  happened — here's  the  letter  I  got  back 
from  my  company  just  yesterday: 

Dear  Lacey: 

We  have  your  letter  of  the  15th,  together 
with  your  weekly  expense  account. 

On  the  whole,  your  expenses  appear  to  be 
running  higher  than  they  should,  but  we  do  not 
want  to  seem  over-critical.  In  the  main  we 
will  therefore  content  ourselves  with  saying 
that  we  trust  that  you  will  be  a  little  more 
careful  in  the  future.  There  is  one  item, 
however,  that  we  do  not  think  we  can  pass 
unnoticed. 


WHAT  ABOUT  REPORTS?  3 

We  find  that  among  your  expenses  on  the 
15th  there  is  included  an  item  of  35  cents 
for  carfare. 

Inasmuch  as  Chesterton  is  a  town  of  only 
25,000,  we  do  not  see  how  it  would  be  reason- 
able,  or  even  possible,   for  you  to  have  spent 
that  amount  in  carfare.    We  have  therefore 
credited  you  with  20  cents  for  this  item, 
which  we  think  is  liberal,   and  have  charged 
the  other  15  cents  to  your  personal  account. 

"Now,  what  do  you  think  of  that,  and  what  would 
you  do  about  it?"  asked  the  salesman,  as  he  finished. 

"I  know  what  I'd  do  about  it,"  said  the  second 
salesman;  "I'd  send  them  a  wire,  collect,  saying  that 
my  sample  case  was  on  its  way  to  the  office." 

"Well,  you  know,  that's  just  what  I  started  to  do," 
said  the  first  salesman,  "but  I  changed  my  mind. 
I've  a  good  job  and  no  particular  fault  to  find  with 
my  work.  So  instead  of  quitting,  I'm  just  going  to 
plug  ahead  and  make  it  a  particular  point  to  squeeze 
in  an  extra  few  cents  each  day  on  my  expanse  account. 
I've  always  given  them  a  square  deal,  but  I  don't 
consider  that  they're  giving  me  one  now,  and  so  I 
won't  hesitate  to  make  that  15  cents  cost  them  S15 
each  and  every  year  I  stay  with  them.  That  will 
help  to  take  the  soreness  out  of  my  system,  I  think." 

Then  the  other  salesman  gave  his  experience. 

"When  I  go  out  on  the  road  I  count  my  money. 
When  I  get  back  I  count  it  again.  I  find  what  the 
difference  is  and  then  I  turn  in  an  account  as  follows: 
'Railroad  fare,  hotel  bills  and  incidentals,  from  such 
and  such  a  date,  so  many  dollars  and  so  many  cents.' 
That's  easy  enough.  Moreover,  I  have  a  lump  sum 
set  aside  at  the  beginning  of  each  year  and  I  draw 
against  this  for  my  expenses.  This  past  year  I  found 
that  it  was  S35  too  much.  So  I  told  the  boss  that  I 
had  $35  of  'charity'  money  in  my  expense  fund,  and 
that  I  was  going  to  distribute  it  to  the  girls  in  the 


4  BOOSTING  THE  SALES  VOLUME 

office  for  Christmas  money.  He  said:  'All  right, 
go  to  it/  and  that's  just  what  I  did." 

This  illustrates  the  two  extremes.  Naturally,  there 
is,  or  should  be,  a  middle  ground.  Here  is  how  one 
sales  manager  gets  a  clear  understanding  with  his 
men  about  expenses  on  the  road : 

"When  I  hire  a  salesman,"  says  this  man,  "I  have 
a  little  talk  with  him  about  expense  accounts  that 
runs  about  like  this  in  most  instances : 

"  'Now,  Mr.  Heywood,  about  your  expense  account. 
Let's  see  if  we  can  understand  each  other  on  this 
point.  You're  not  going  to  find  us  too  exacting. 
I've  been  out  on  the  road  myself  and  I  know  that 
there  are  times  and  occasions  when  it's  necessary  for 
you  to  spend  a  little  money  for  your  own  good  and 
for  the  good  of  the  company  that  might  not  come 
under  a  strict  interpretation  of  legitimate  expense. 

**  *If  this  situation  comes  up,  put  the  item  down 
for  what  it  is.  Don't  try  to  slide  it  by  under  some 
other  items.  I  want  to  feel  that  you  are  going  out 
with  our  complete  confidence  in  this  respect.  I'm 
not  going  to  look  over  your  expense  account  and 
scrutinize  each  item.  I  naturally  know  about  what  it 
should  cost  you  to  travel  your  territory,  and  I  expect 
you  to  keep  somewhere  in  that  neighborhood.  We're 
paying  your  expenses  and  we're  willing  to  give  that 
word  'expenses'  a  fairly  broad  meaning  just  as  long 
as  you  don't  attempt  to  abuse  it. 

"  'We  don't  expect  and  won't  stand  for  your  trying 
to  make  or  save  money  on  your  expense  account. 
If  you  want  more  money  than  we're  paying  you  it 
will  be  a  lot  easier  to  get  it  by  turning  in  more  business 
than  we  expect.  I'm  not  putting  you  on  your  honor, 
because  I  take  it  that  you  understand  that  you've 
already  got  my  confidence  or  I  wouldn't  have  hired 
you.  I'm  just  expecting  you  to  be  as  fair  and  square 
with  us  as  we're  willing  to  be  with  you.' 


19 Weeks                                |\ 

Salesmen 

1 

2 

3 

4 

5 

6 

7    MB 

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50 

51 

52 

Total 

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Total  weekly 
sales  expense 

Figure  1:  This  expense  report  has  reduced  the  expense  accounts  of 
salesmen  materially  in  one  concern.  The  upper  set  of  figures  after 
each  name  shows  the  total  expense  for  the  week.  The  lower  set  are 
small  items  which  the  sales  manager  believes  could  easily  be  eliminated. 

5 


SALESMAN'S  DAILY  REPORT 

INSTRUCnON-fiead  carefully.    Reports  must  be  number  of  dozens  and  net  amount  in  dollar*  and  cenw  of 

mde  out  and  maifed  at  the  Cose  of  each  day's  ^1^ '^nrtt^n::^^''  :"Zl  'TZlZ 

business,  showlnii  every  call  made  and  order  taken.  In  „|unin.  write  auch  information  as  Is  needed   for   olfiiCB 
tk»  columns  lieaded  "Jobber,  Retailer,  Department  Store'-   ,^^^6  and  special  definite  information  lor   following  up 
write  names  of  dealers  called  on.    Place  the  letters  J.  R.   y^^^  work  from  the  office.    After  all  orders  to  be  filled  / 
or  D.  In  first  column  to  right  of  dealer's  name,  to  indicate   ||,fough  jobbers,  write  jobber's  name  in  remarks  column.  / 
whether  «  jobber,  retailer  or  department  store.    Show  bb  careful  to  give  all  information  called  for  on  this  fepon.j 

Jobber  Retailer  Department  Store 

J. 
R. 

D. 

Sold 
Today 
Dozen 

Direct  Orders 
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Totals 

Figure  2:  A  daily  report  from  salesmen  which  gives  information 
about  every  call  made,  is  required  by  one  concern.  The  left  half  of 
the  record  is  shown  here  and  the  right  half  on  the  opposite  page.  The 
report  indicates  whether  the  concern  called  on  is  a  jobber,  retail  dealer, 

6 


Date 


Salesman 


Town 


Turn-Over 

Orders 
Net  Value 


Remarks 


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or  department  store;  the  total  sales;  net  value  of  direct  orders;  net 
value  of  turn-over  orders;  and  whether  or  not  the  customer  is  a  stock- 
holder in  the  manufacturer's  company.  With  comprehensive  informa- 
tion such  as  this  about  each  customer  at  hand,  better  service  is  possible. 


8  BOOSTING  THE  SALES  VOLUME 

"Occasionally  I  get  'stung,'  "  says  this  sales  man- 
ager, "but  it  happens  that  I  do  watch  a  new  man's 
expense  account  pretty  closely,  and  it  does  not  take 
long  to  catch  the  deliberate  padder.  I  remember 
once  a  new  man  sent  in  an  expense  account  for  the 
first  week  almost  suspiciously  a  model  of  completeness 
and  exactness.  When  I  saw  the  amount  of  mileage 
that  he  had  used,  and  the  calls  he  had  made,  and  the 
amount  of  business  he  hadn't  turned  in,  I  started 
digging  deeper  into  his  account.  With  the  aid  of  a 
ticket  office  nearby  I  found  that  we  were  being  charged 
just  7^  cents  for  each  mile  he  had  traveled.  A  wire 
brought  him  in.  His  only  defense  was  that  if  there 
had  been  any  mistake  it  was  because  the  ticket  agents 
had  swindled  him  in  tearing  out  his  mileage  and  he 
put  up  a  mighty  wail  about  the  rascally  agents. 

"  'All  right,  then,'  I  said.  'I  was  going  to  fire  you 
for  padding  your  expense  account,  but  if  it  suits  you 
any  better  you're  fired  for  being  such  an  easy  mark 
that  every  ticket  agent  you  meet  can  steal  from  you !' 

"But  such  experiences  have  been  mighty  few.  On 
the  whole  I  find  that  salesmen  are  ready  to  meet  me 
half  way.  I  do  not  mean  to  say  that  it's  unnecessary 
for  most  organizations  to  have  a  careful  auditing  of 
expense  accounts.  But  I  do  believe  that  it  is  a  lot 
more  profitable  in  the  long  run  to  take  a  positive 
instead  of  a  negative  attitude  with  salesmen;  to  say, 
'That  was  a  fine  day's  work,'  instead  of,  'You  spent 
15  cents  too  much  on  carfare,  which  is  therefore 
charged  to  your  personal  account. '  " 

When  rising  costs  of  travel  and  entertainment 
made  it  necessary  to  watch  expenses  more  closely,  the 
sales  manager  of  a  Cleveland  concern  originated  a 
plan  which  called  the  attention  of  the  salesmen  to 
the  little  items  of  expense  which  might  be  eUminated 
without  making  them  feel  they  were  being  imposed 
on,  or  their  honesty  questioned. 


WHAT  ABOUT  REPORTS?  9 

This  concern  requires  weekly  expense  reports.  The 
sales  manager  devised  a  form  (Figure  1)  for  tabu- 
lating these  reports  for  each  salesman  each  week. 
The  space  allotted  to  each  man  was  wide  enough  for 
two  sets  of  figures.  Above,  the  sales  manager  placed 
the  total  expense  for  the  week.  Just  below,  in  red 
ink,  he  wrote  in  the  small  items  and  their  amounts 
which,  it  seemed  to  him,  might  be  ehminated.  These 
amounts  were  never  deducted  from  the  expense 
accounts,  but  whenever  a  salesman  came  into  the  office 
the  sales  manager  got  out  his  record  and  talked  over 
the  small  items  with  him  in  detail. 

He  invariably  was  able  to  make  the  salesman  see 
that  these  items,  while  small  in  themselves,  totaled 
a  large  item  of  added  expense  to  the  company  in  the 
course  of  a  year.  As  a  result  of  this  plan  the  traveling 
expense  was  reduced  by  a  substantial  amount  and 
the  force  was  just  as  well  satisfied. 

In  another  concern  no  expense  reports  are  required, 
but  a  plan  has  been  worked  out  which  keeps  down 
the  seUing  expense  and  also  helps  the  salesman  to 
save  a  part  of  his  salary.  These  men  work  on  com- 
mission, 75%  of  which  is  paid  when  the  order  is 
O.  K.'d.  The  remaining  25%  is  held  by  the  com- 
pany as  a  proper  amount  to  be  saved.  Usually 
$15  a  week  is  sent  to  the  man's  wife  and  $35  is  sent 
to  the  salesman  for  traveling  and  living  expenses. 
In  this  way  the  expense  is  kept  at  a  fixed  figure,  and 
there  seldom  is  any  argument  over  expense  reports. 
This  plan  has  been  entirely  satisfactory  to  the  sales- 
men, it  is  reported  by  the  sales  manager. 

''One  of  the  steps  often  overdone  by  sales  managers 
is  the  checking  of  expense  accounts  too  minutely," 
said  the  sales  manager  of  a  concern  in  the  Middle 
West.  "This  house  requires  a  weekly  statement  of 
expenses,  but  is  liberal  in  the  construction  placed  on 
the  word,  'expense,'  by  our  men. 


ORDERS  RECEIVED 

1 

NEW  REGISTERS 

Totals   ' 

Cash 
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Wilh 
Order 

Class 
One 

Class 
100 

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Credit 
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sis. 

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1 

1 

~:    SALES  RECORD  FOR  MONTH  OF                19        Dato  Appointed             Succeeds               DntR  Dncekiil 

—  o« 

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City 

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State 

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AMERICAN  SALES  RECORDS 

■1 

. 

Agencies  arranged 
^    by  states  for  year 
5             191_ 

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AGENCY                                             QUOTA 

1 

Agent                                                  Appointed 

Agent                                                 Appointed 

Agent                                                  Appointed 

County 

State 

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January 

Net 
Pomts 

Februar 
IMel 
Points 

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Mont 
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March 

s    Net 

Points 

Three 
Months' 
Total 

April 
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Ifou, 
Monthi 
Total 

May 
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Months 
Total 

June 
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July 
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Points 

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Months" 
Total 

August    El 
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T — r 

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) 

^._ 

Figure  3:  The  half-dozen  forms  reproduced  here  a«d  on  the  opposite 
page  show  how  sales  records  can  be  classified  to  indicate  accurately 
the  performance  of  every  unit  of  the  sales  force.  This  includes  all 
the   sales  records,  from  the  individual  salesman's  to  the  total  for  the 

10 


entire  organization.  You  will  note  that  there  are  forms  for  sales  by 
days,  weeks,  months,  and  for  the  year.  The  record  shown  at  the 
bottom  provides  essential  information  about  agency  sales,  and  the 
one  just  above  it  at  the  right  gives  salesmen's  records  by  divisions. 

11 


12  BOOSTING  THE  SALES  VOLUME 

"Some  sales  managers,"  he  continued,  "go  so  far 
as  to  ask  whether  or  not  the  salesman  smokes  the 
cigars  he  charges  on  his  expense  account  or  whether 
he  gives  them  to  the  trade.  In  one  instance  I  suppose 
the  item  would  appear  under  the  heading  of  'con- 
sumed direct,'  and  in  the  other  case  under  the  heading, 
'consumed  indirect,'  and  treated  accordingly. 

"In  my  opinion,  95%  of  all  salesmen  are  funda- 
mentally honest,  and  the  other  5%  will  show  them- 
selves up  in  a  very  little  while  if  the  manager  keeps 
his  eyes  open.  We  don't  need  to  run  the  risk  of 
making  the  honest  95%  think  that  we  believe  them 
capable  of  being  crooked.  When  we  do,  we  usually 
either  materially  impair  their  usefulness  or  lose  them 
entirely.  When  we  hurt  a  man's  self-respect  we  hurt 
him  all  over  I  have  always  found. 

YOU'LL  AGREE  I'HAT  HERE  IS  A  DANGER  POINT  IT  WILL  PAY 
WELL  TO  STEER  CLEAR  OF 

"It  is  common  knowledge  that  a  salesman  usually 
can  pad  an  expense  account  so  that  no  inside  staff 
can  catch  him,  if  it  gets  to  a  point  where  he  thinks  it 
is  a  contest.  Brand  him  as  a  thief,  and  if  he  remains 
with  the  concern  he  will  show  that  a  thief  can  i  beat 
the  'expense'  game.  Many  of  the  great  packing 
houses  and  other  industrial  concerns  which  have  dis- 
continued too  minute  checking  of  expense  accounts 
will  agree  with  me  that  this  is  true. 

"Then,  too,  why  should  a  highly  paid  sales  manager 
or  division  manager  devote  his  time  to  the  detecting 
of  a  30-cent  irregularity  when  the  holding  of  his 
important  position  requires  concentration  on  far  more 
imperative  and  important  tasks. 

"Another  point  to  bear  in  mind  in  the  handling  of 
salesmen's  expense  is  the  danger  of  developing  an 
attitude  of  picayuneness  and  niggardliness.  By  his 
very  nature  the  big,   successful  salesman  is  not  a 


WHAT  ABOUT  REPORTS?  13 

'tight-wad.'  A  'tight-wad'  will  smoke  a  two-for-a- 
nickel  cigar  and  spend  a  whole  day  in  selling  a  $10 
order  to  a  blacksmith— that's  about  his  limit,  for  he 
naturally  doesn't  understand  how  to  approach  men 
who  handle  and  give  out  big  business. 

"On  the  other  hand,  the  salesman  who  smokes  two- 
for-a-quarter  cigars  and  is  not  backward  in  buying 
a  CaroHna  Perfecto  at  $1  when  occasion  demands, 
is  usually  one  who  is  not  afraid  of  and  knows  how  to 
handle  the  man  who  places  big  contracts.  You  cannot 
have  a  salesman  small  in  money  matters  and  not  have 
him  small  in  other  ways.  Make  him  think  in  nickels 
and  he  will  deal  in  nickels  all  along  the  hne. 

"It  should  not  be  inferred  that  I  believe  in  a  policy 
of  'taking  the  lid  off'  on  expenses.  I  keep  my  weather 
eye  open  for  irregularities,  and  when  I  detect  any  item 
that  appears  to  be  out  of  the  way  I  manage  somehow 
to  let  the  offender  square  it  up  without  questioning  his 
integrity.  Usually  one  experience  of  this  sort  is 
enough  to  serve  as  a  permanent  warning  to  any  man 
who  has  a  tendency  in  this  direction." 

In  asking  a  salesman  to  keep  a  careful  record  of  his 
expenses,  another  sales  manager  makes  salesman 
reaUze  that  no  concern  can  afford  to  pay  more  than  a 
certain  percentage  of  the  sales  price  to  sell  its  goods, 
and  that  the  larger  the  amount  of  money  the  salesmen 
spend  for  expenses,  the  smaller  will  be  the  amount  the 
concern  can  afford  to  give  them  in  remuneration. 

He  points  out  that  excessive  expenses  will  reduce  the 
net  earnings  for  the  company  and  prevent  it  from 
putting  on  more  Unes  or  offering  greater  inducements 
to  the  dealer.  By  making  it  clear  that  the  house  has 
the  welfare  of  the  whole  force  at  heart  and  does  not 
propose  to  let  any  individual  keep  down  the  earnings 
of  his  fellows,  he  invariably  secures  the  cooperation 
of  each  man.  It  makes  them  willing  to  fill  out  reports 
when  they  can  see  that  some  definite  good  is  resulting. 


U  BOOSTING  THE  SALES  VOLUME 

In  handling  expense  reports  the  primary  essential 
is  tact,  declares  the  sales  manager  of  one  house.  An 
over-conscientious  office  manager  once  produced  a 
demoralizing  result  among  the  salesmen  of  his  concern 
with  a  determined  campaign  to  reduce  traveling  ex- 
penses. The  campaign  cost  the  firm  the  services  of 
two  excellent  salesmen,  and  kept  the  entire  force  of 
54  men  irritated  and  resentful  for  several  weeks. 

The  office  manager  was  convinced  that  every  sales- 
man could  reduce  his  weekly  expenses  at  least  $1,  so 
he  went  over  the  expense  books  and  pointed  out  the 
way.  Every  week  each  salesman  received  a  letter 
from  him  explaining  in  detail  how  the  $1  could  have 
been  saved.  The  aggregate,  to  the  financially  trained 
mind  of  the  office  manager,  seemed  well  worth  attempt- 
ing to  save  but  to  the  majority  of  the  salesmen  the 
effort  appeared  trivial  and  contemptible.. 

Finally  one  of  the  salesmen  who  was  blessed  with  a 
sense  of  humor  addressed  a  communication  to  the  firm, 
which  happened  to  reach  the  president's  office.  He 
started  an  investigation  which  resulted  in  the  abrupt 
cessation  of  the  follow-up. 

This  salesman  pinned  a  dollar  bill  to  one  of  the 
economy  letters  and  returned  it.  "Here's  my  $1,"  he 
wrote,  "and  I'll  send  one  every  week  hereafter.  But 
for  heaven's  sake,  don't  write  me  any  more  letters  like 
the  one  you  wrote  yesterday.  They  upset  me  for 
the  day.  My  expense  account  is  O.K.  My  price  is 
$500,000 — nothing  less  would  tempt  me,  and  I'm  too 
busy  selling  goods  to  count  pennies.  Please  have  the 
auditing  department  take  me  off  their  mailing  list." 

The  office  manager's  letters  hurt  the  feelings  of  many 
of  the  salesmen.  Most  of  them  took  the  questioning 
of  their  accounts  as  an  insinuation  of  their  dishonesty. 

In  direct  contrast  to  the  office  manager's  tactless 
campaign  is  the  carefully  planned  correspondence  of  a 
sales  manager  who  directs  the  work  of  about  30  men. 


1                                  ,                                                                                   

DATE. 

No. 

M  0 

Or<)«r 

SpKial 

NAME 

TOWN 

State  Delivery 

Amount 

Sold 
Ust 

By 

Rating 

Re(»rt 

Relof 

Turn 
Down 

- 

^ 

- 



— 

==3 

rrzz: 

— 



~ 

~1 

—\ 



1 

Figure  4:  One  progressive  company  keeps  a  record  of  sales  to  each 
customer  on  this  form,  which  is  sent  in  at  the  end  of  each  day  by 
the  salesman.     The  sheet  also  shows  the  credit  rating  of  the  customer. 


SALESMAN     Laemmax 

DEALER    BuXlard  and  Corml^  1 

Discount 

Year 

RATING 

AT            7  East  Lake  Street     \ 

Sheet 
Number 

/ 

Through  What  Jobber 

Jan. 

Feb. 

Mar. 

Apr. 

May. 

June. 

JulylW 

Nov. 

Dec. 

Total 

/ 

\ 

I 

\ 

Iroo  Bnamel 

Totals 

( 

Figure  5 :  New  accounts  are  reported  by  salesmen  on  this  form.  The 
rating  of  the  dealer  is  given,  and  the  name  of  the  jobber  who  is  to 
handle  his  goods.    Only  the  total  amount  of  the  sale  goes  on  this  report. 

15 


If  cii^tompr  IS  sold  nnrt  there    INFORMATION      SHEET 

are  no  changns  or  other  in- 
formation to  report^  simply 
send  this  sheet  with  order. 


Season 

\_)  Amount  of  order. 


Customer- 


_Order  last  season. 


.Order  year  ago_ 


GENERAL    INFORMATION 

Changr  in  partnership  or  firmnamc?^_^ 


If  unsold.the  following  brank  must  be  filled  out 
carefully,  and  as  completely  as  possible. 


Old  you  call  for  coming  season?_ 


Is  this  account  undesirable?- 


Refused  by  credit  depaftmcnt?_ 


_ExpPct  to  sell  again?_ 


Advertising  Manager?_ 


Unusual  local  conditions?- 


O 


Did  they  give  any  of  these  reasons  for  not  buying?_ 

Poor  Business? Overstocked? 

Dissatisfied  with  line? IVIodels? Pat 

Fit? Wear? Deliveries?— 

General  Service? 


.Clotheraft  hard  to  sell?_ 


Any  other  reason? 

Changed  to  another  line?. 
Additional  infornnalion- 


Figure  6:  In  one  concern  salesmen's  reports  are  made  out  on  this 
"information  sheet."  The  report  gives  the  customer's  name  and  city, 
the  amount  of  the  order,  or  the  reason  for  failure  to  obtain  an  order. 


Salesman 


Your  Sales  Quota  for  this  season  is 

Your  results  on  orders  received  up  to 


Totals  of  atcounts  on  your 
list  at  start  of  season 


Show  the  following 

Class  "A"         Class  "B"  Class  "C"  Class  "D" 


-Accounts      Accounts 


Additions  to  list  since  start 
of  season. 


:s      Accounts      . Accounts       Accounts       . — Accounts 


Totals  of  all  accounts. 


Accounts       . — Accounts 


Totals  of  accounts  sold  or 
reported  will  not  buy 


■  Arrriiint^       . Accounts       — Accounts       Accounts 


Totals  of  balance  still  to  be 
sold  or  reported 


Accounts      Accounts 


Accounts      Accounts 


Totals  of  sales  made  up  to  date 
of  this   report. 


Accounts      Accounts 


Accounts      AccouhTs 


Increase 
Decrease 


Original  Quota- 
Sold  to  Date 


Balance  to  SelL 


Figure  7:  One  company  keeps  its  salesmen  informed  on  the  progress 
of  their  work  by  sending  them  this  weekly  report.  It  shows  the  salesman 
his  sales  quota  for  the  season,  his  results  to  date,  and  his  balance  to  sell. 

16 


WHAT  ABOUT  REPORTS?         17 

He  was  convinced  that  traveling  expenses  could  br 
reduced,  but  he  knew  it  was  necessary  to  get  the  men 
to  work  with  him.  Three  letters  formed  his  series. 
Knowing  his  men  well,  he  modified  the  forms  where  he 
felt  it  was  necessary.  Here  is  his  first  letter.  Note 
how  tactfully  it  is  worded: 

Yesterday  the  entire  time  of  a  conference 
with  the  president  was  taken  up  with  a  serious 
discussion  of  rising  costs,  increased  prices 
of  material,  and  reduced  profits.  And  you  may  ' 
be  sure  that  our  sales  organization  came  in  for 
its  share  of  attention. 

Our  selling  cost  was  considered  excessive. 
In  fact  a  good  deal  of  criticism  was  aimed  at 
me,  and  I  am  expected  materially  to  reduce  the 
cost  of  marketing  our  goods. 

Now,  we  will  not  consider  for  a  moment  the 
reduction  of  salaries  or  commissions.   I  know 
that  your  earnings  are  not  excessive  for  the 
service  you  are  giving  us,  but  I  am  going  to  ask 
you  to  reduce  traveling  expenses  if  possible. 

I  am  absolutely  convinced  that  not  a  single 
member  of  our  sales  force  would  consciously 
spend  a  cent  of  the  firm's  money  unnecessarily. 
But  I  believe  that  expenses  may  be  lowered  if 
all  expenditures  are  made  only  after  fully 
considering  their  necessity. 

Understand,  the  company  does  not  want  you 
to  sacrifice  your  comfort  for  economy.  We 
know  that  our  salesmen  are  gentlemen,  and  we 
want  them  to  travel  like  gentlemen.  If,  however, 
you  can  curtail  expenses  a  little  here  and  there 
it  will  help  materially  to  reduce  the  excess  on 
our  bill  for  traveling. 

I've  been  given  to  understand  that  selling 
costs  must  come  down.  This  is  unpleasant  news 
to  me,  and  I  know  that  you  will  do  everything 
you  can  to  prevent  a  repetition  of  the  command. 

Every  good  wish  for  your  continued  success. 


18  BOOSTING  THE  SALES  VOLUME 

The  second  letter  followed  in  two  weeks.  It  gave 
the  sales  manager's  experience  in  taking  his  own 
medicine  right  along  with  his  "boys": 

Referring  again  to  traveling  expenses: 
I've  just  returned  from  a  little  trip  and  thought 
my  experience  with  economy  would  interest  you. 

The  trip  took  only  10  days,  and  I  had  to 
make  two  jumps  that  were  longer  than  the 
average . 

I  didn't  try  to  break  any  records,  and  I'm 
surprised  to  learn  this  morning  that  my  average 
expense  a  day  is  35  cents  lower  than  the  indi- 
vidual average  daily  expense.  And,  I  must 
confess,  it  is  considerably  less  than  the  ex- 
pense of  any  of  my  previous  trips. 

This  was  accomplished,  Mr.  Buchanan,  by 
my  determination  to  keep  my  expenses  as  low  as 
possible  without  sacrificing  time  or  necessary 
convenience.  I  hesitated  before  spending,  to 
assure  myself  that  the  expenditure  was  neces- 
sary. When  I  did  not  feel  assured  I  saved  money. 
That  was  all. 

If  the  entire  sales  force  will  put  this 
simple  method  into  practice,  I  know  that  we  will 
all  be  gratified  at  the  results.  You  know  the 
conditions  I  am  working  under,  and  I  feel  sure 
you  will  continue  to  keep  in  mind  the  necessity 
of  lowering  expenses  whenever  we  can. 

The  third  letter  reported  favorable  progress  for  the 
economy  campaign.  It  followed  10  days  later: 

Accept  my  thanks  for  your  part  in  the 
reduction  of  selling  expense,  which  was  shown 
during  the  month  just  past.  The  auditor  has  just 
made  his  report,  which  was  called  to  my  attention 
by  the  president,  who  offered  congratulations 
which  I  gladly  pass  on  to  you. 

The  reduction  already  made  promises  a  very 
satisfactory  saving  for  the  year.  This  is  very 


Orders  received  inclusive  of^ . . 

Current  Season 

Class 

Original  Orders 

Additions 
to  Orders 

Total  Sold 

No. 

Amount 

A 

B 

C 

D 

E 

Total 
all  a/e 

Total  old 
this  year 

Total  old 
year  ago. 

Difference 
on  old 

Difference 
on  total 

Total  Business  Year  Ago 

Original  Orders 

Additions 

Cancellations 

Net 

Will  Not  Sell  This  Season 

Cancellations 

Year  Ago                     Current  Season 

Amount 

Apply  On 

Net 

Aiaount 

Apply  On 

Net 

Explanation 

A — Accounts  which  bought  both  last  season  and  year  ago. 
B — Accounts  which  bought  last  season,  but  not  year  ago. 
C — Accounts  which  bought  last  year,  but  not  last  seasoa. 
D — Old  accounts  which  did  not  buy  during  past  year. 
E — New  accounts. 

Figure  8:  This  sheet  classifies  the  salesmen's  current  orders  under 
new  or  old  accounts.  If  the  account  is  an  old  one,  the  report  gives  a 
detailed  history  of  all  the  transactions  which  have  taken  place.  Such 
data  on  every  account  usually  helps  to  stimulate  the   selling  force. 

19 


20  BOOSTING  THE  SALES  VOLUME 

gratifying  to  me,  but  I  assure  you  that  I  am  far 
more  pleased  with  the  knowledge  that  I  have  your 
full  cooperation,  and  that  you  have  complied 
with  a  request  of  mine  with  such  good  will. 

It  is  interesting  to  know  that  the  reduction  in 
expenses  was  greatest  after  this  third  letter.  The 
repUes  were  varied.  Some  men  simply  said  that  their 
traveling  expense  was  as  low  as  it  was  possible  to 
make  it,  and  some  frankly  admitted  they  were  spending 
too  much  money.  A  very  profitable  reduction  was 
accomplished,  and  not  a  salesman  was  discouraged. 
No  one  felt  that  his  honesty  had  been  questioned. 
Not  a  single  man  got  angry  about  it. 

These  illustrations  show  how  some  concerns  are 
meeting  the  difficult  problem  of  expense  reports.  Now 
let  us  see  how  they  keep  effective  records  of  their  sales 
and  how  they  classify  accurately  the  reports  sent  in 
by  their  salesmen  from  the  road. 

Investigation  indicates  that  the  practice  varies. 
Some  concerns  require  merely  a  routine  report  on 
orders,  and  some  require  a  report  of  every  call  whether 
an  order  was  secured  or  not,  and  in  addition  ask  for 
numerous  reports  on  the  standing  of  the  customer  or 
prospect,  the  type  of  store  he  has,  whether  he  adver- 
tises or  not,  and  numerous  other  details. 

One  concern  which  manufactures  a  line  of  toilet 
preparations  requires  its  salesmen  to  fill  out  the  daily 
report  form  shown  in  Figure  2.  This  form  is  inter- 
esting because  it  provides  for  a  report  on  three  different 
Hnes  of  business  on  the  same  form,  and  also  has  space 
for  recording  the  net  value  of  direct  orders,  and  the 
net  value  of ' '  turnover  "  orders.*  It  happens,  als  o,that 
this  concern  has  sold  some  of  its  capital  stock  to  a 


*  "Turnover"  orders  are  orders  booked  by  a  salesman  representing  a  manufactur- 
ing concern,  which  are  turned  over  to  a  jobber  rather  than  handled  direct.  Usually 
they  are  for  a  certain  product,  the  sales  of  which  the  manufacturer  wants  especially 
to  stimulate,  or  for  a  product  which  is  entirely  new. 


state                       City                         Salesman          Population 

Customer 
Number 

Customer 

1915 

1916 

1917      1 

Spring 

Fall 

Spring 

Fall 

Spring 

Fall 

Total 

Remarks: 

- 

Figure  9:  Each  salesman's  sales  are  also  recorded  on  cards  according 
to  the  state  and  city  in  which  the  customer  is  located.  Total  sales  of 
each  customer  over  a  period  of  three  years  are  set  down  on  these  cards. 


RfiRapitulation  of  O.K.  acenunts      SaiPQman                                            Pano                 1 

1 

Customer 

Location 

Class 
A 

Class 
B 

Class 
C 

Class 
D 

Class 

E 

Sales            1 

Increase 

Decrease 

u 

o 

Figure  10:  This  recapitulation  sheet  classifies  each  salesman's  good 
accounts  under  one  of  five  divisions.  These  classes  are  explained  in 
Figure  8.     This  information  helps   to   keep   track   of  the   customers. 

21 


NAME                                                   CITY                                               SALESMAN 

Original 
Order 

"A" 
Cancel 

Addi 

tions 

Revised 
Order 

"B" 

Cancel 

"C" 

Cancel 

Total 

Cancel 

Net 
Order 

Un- 
shipped 

Net 
Shipped 
on  Order 

Yearly  Summary 

Spring 
1915 

Allo/»ance3 

Not 
Business 

Fall 
1915 

Returns 

Mail 
Orders 

Total 
1915 

Tolfl 
Credits 

Net.ChQ. 
or)  Order 

Spring 
1916 

Allowances 

Net 
Business 

Fall 
1916 

Returns 

Mail 
Orders 

Total 
1916 

Total 
Credits 

Net  Chg. 
on  Order 

-Tff9~ 

. 

' 

1 

— 

~~ ' 

Fall 
1919 

Returns 

Mail 
Orders 

Total 
1919 

Total 
Credits 

Nut. Chg. 
on  Order 

Figure  11:  A  record  of  each  customer's  account  is  kept  by  one  con- 
cern on  this  8x5  card.  The  card  is  ruled  on  both  sides,  and  provides 
for  a  10  years'  summary  of  the  business  transacted  with  each  customer. 


Customer 

Location                                                                        When  organized 

Year 

Original 
Orders 

Re- 
orders 

Cancel- 
lations 

Regular 
Ship- 
ments 

Re- 
turns 

Memo 

Ship- 
ments 

Memo 
Re- 
turns 

Highest 
Credit 

Pays 

1 

c 
o 

C.    C.    H. 

Ratings 

Salesman 

1 

1 

1 

1 

1 

1 

6 

S 

i 

1 

1 
1 

OJ 

S 

2 

2 

at 

2 

Other  Credit   Information 

Figure  12:  Credit  information  on  the  customer,  in  addition  to  a 
record  of  purchases,  is  provided  on  this  form.  The  card  gives  the 
customer's  rating;  his  original  orders,   reorders,   returns,   and   so  on. 

22 


WHAT  ABOUT  REPORTS?  23 

number  of  the  dealers  handling  its  goods,  and  so 
provision  is  made  for  recording  whether  or  not  the 
sale  is  made  to  a  stockholder. 

Probably  one  of  the  best  examples  of  how  sales 
records  can  be  classified  to  show  the  work  of  each 
salesman,  and  each  subdivision  of  the  sales  organiza- 
tion, is  shown  by  the  group  of  forms  in  Figure  3. 
These  records  are  cumulative  in  that  they  show  a 
classified  record  of  performance  for  every  unit  of  the 
sales  force  from  the  individual  salesman  up  to  the 
total  for  the  whole  organization  over  the  entire  country. 
It  will  be  noticed  also  that  there  are  records  for  the 
day,  week,  month,  and  year. 

In  one  clothing  concern  a  record  of  sales  to  each 
customer  is  kept  on  the  form  shown  in  Figure  4. 
This  form  also  serves  as  a  credit  report  on  the  customer. 

When  a  salesman  opens  an  account  he  makes  his 
first  report  on  the  new  customer  on  a  form  like  the 
one  shown  in  Figure  5,  reporting  only  the  total 
amount  of  the  sale  under  the  month  in  which  it  is 
made.  This  report  then  is  filed  and  each  succeeding 
month  the  amount  of  sales  made  to  the  customer  are 
recorded  on  this  form.  At  the  end  of  the  year  the 
concern  can  tell  at  a  glance  what  the  total  amount 
of  business  has  been  for  each  customer. 

In  one  concern — it  manufactures  clothing — the 
reports  which  the  company  send  to  the  salesmen  and 
the  forms  upon  which  the  sales  of  each  man  are 
classified,  are  even  more  important  than  the  reports 
sent  in  by  the  salesmen.  The  reports  which  the  men 
on  the  road  send  in  show  the  number  of  calls,  the 
orders,  the  amount  of  the  order  or  the  reason  why  no 
order  was  obtained  (Figure  6) . 

To  keep  the  salesman  constantly  informed  as  to  the 
progress  of  his  work,  however,  and  to  keep  before  him 
a  constant  incentive  to  do  his  best  at  all  times,  the 
company  sends  out  a  report  each  week  to  each  man 


24  BOOSTING  THE  SALES  VOLUME 

showing  his  performance  for  the  week.  This  report 
(Figure  7)  keeps  the  man  informed  week  by  week 
of  the  amount  of  his  quota  which  he  has  sold,  and  the 
amount  he  should  sell.  It  also  shows  the  number  of 
new  customers  he  has  secured. 

Another  sheet  (Figure  8)  also  is  sent  out.  It 
classifies  the  salesmen's  work  according  to  whether 
the  account  is  old  or  new,  and  if  old,  when  the  last 
order  was  received.  It  also  shows  what  additions 
have  been  made  to  the  original  order.  Both  these 
reports  have  been  effective  in  keeping  salesmen  up 
to  the  mark  they  are  working  for  and  have  helped 
materially  in  getting  the  most  out  of  the  selling  force. 

This  concern  also  keeps  a  careful  record  of  the  sales 
of  each  salesman.  These  are  classified  according  to 
their  geographical  location  (Figure  9)  and  alphabet- 
ically by  customers  (Figure  10).  A  detailed  record 
of  the  purchases  of  each  customer  is  kept  on  a 
card  like  the  one  shown  in  Figure  11.  This  card  is 
ruled  on  both  sides  so  that  a  complete  record  of  each 
customer's  purchases  over  a  period  of  10  years  always 
is  available  in  compact  form. 

A  somewhat  similar  form  used  by  another  concern 
has  the  additional  advantage  of  supplying  credit 
information.  This  form  (Figure  12)  shows  the 
rating  of  the  firm  each  year,  how  payment  was  made 
and  the  amount  of  the  orders,  the  reorders,  and  so  on. 

No  matter  what  the  form  of  sales  report  the  sales- 
man carries  or  what  sort  of  records  of  sales  are  kept 
in  the  office,  the  sales  manager  is  up  against  it  if  he 
cannot  secure  the  full  cooperation  of  the  salesmen  in 
filling  out  the  reports,  it  is  plain. 

One  man,  who  has  had  long  experience  both  as 
salesman  and  sales  manager,  tells  here  what  he  thinks 
of  the  value  of  reports  and  describes  some  methods 
which  have  proved  effective  for  him  in  getting  the 
salesman's  cooperation  in  filling  them  out. 


Name 

REQUEST 

FOR 

LINE 

Salesman 

Location 

Population 

Date 

Dun's 

Bradstreets 

Salesman 

Notified  (Date) 

Disposition                                                                                                    1 

Remarks, 

Figure  13:  When  the  salesmen  of  one  concern  receive  requests  for 
agencies  they  send  in  this  card  measuring  6x4  inches.  The  disposition 
of  the  request  is  indicated,  and  the  date  the  salesman  was  notified. 


This  side  out 


Name 


PROSPECTIVE    CUSTOMER 

Salesman 


Town 


State 


Population 


Dun's 


Bradstreet's 


Remarks 


Advertise 


Replies 


Figure  14:  The  salesmen  of  another  concern  use  the  record  shown 
here  for  prospective  customers.  The  population  of  the  town,  the 
dealer's  credit   rating,   and   his   advertising   activities  are   indicated. 

25 


26  BOOSTING  THE  SALES  VOLUME 

"There  are  some  concerns  and  salesmen,"  he  says 
''who  consider  a  salesman's  report  as  empty  of  profit 
as  a  dust  heap — a  mere  rubbishy  record  of  struggles 
past  and  gone  and  done  for  forever. 

"'Ancient  history/  they  say!  'Tales  that  are  old! 
Wipe  those  old  reports  off  the  slate' !  Well,  go  ahead 
and  wipe  them  off.  And  with  them  you'll  sponge  off 
possibilities  of  future  earnings — wipe  figures  out  of 
future  bank  balances — work  toward  wiping  your  con- 
cern off  the  map.  'We  don't  need  reports  any  more,' 
said  one  sales  manager  to  me.  'They  are  obsolete 
with  us.  We  hire  only  high-class  men,  and  we  trust 
them  to  bring  in  the  business.  All  we  ask  is  that  they 
keep  us  informed  about  their  expenses.' 

"Leave  it  to  them!  I  should  say  he  did!  He  left 
the  work  of  getting  results  to  them  as  completely  as 
if  he  were  not  a  part  of  the  concern.  And  after  the 
company  had  paid  them  for  a  time  and  permitted 
them  to  raise  up  a  crop  of  enemies  for  the  concern 
that  it  took  months  to  placate,  he  then  saw  to  it  that 
the  offending  salesmen  were  fired,  and  the  money  spent 
on  them  was  charged  off  to  profit  and  loss. 

IF  THE  SALES  MANAGER  HAD  ADOPTED  THIS  POLICY  HE 
PROBABLY  WOULD  HAVE  SECURED  BETTER  RESULTS 

"What  he  should  have  said  was:  'We  trust  our 
salesmen,  and  use  their  reports  to  help  them  get 
greater  and  greater  results  each  month.  On  a  study 
of  the  data  gathered  from  their  reports  from  all  points, 
we  base  the  sales  policies  of  this  business.' 

"There  are  salesmen  who  regard  a  report  as  not 
merely  useless,  but  as  positively  mischievous. 

"Well,  I'm  with  them — in  heart.  But  not  in  head. 
I'm  a  salesman  of  a  sort  myself,  with  a  salesman's 
temperament.  It's  a  curious  fact  that  the  salesman's 
temperament  makes  men  who  can  sell  hate  such  'book- 
keeping work'  as  filUng  out  reports.     I  have  myself 


WHAT  ABOUT  REPORTS?  27 

devised  all  sorts  of  reports  for  salesmen  to  fill  out — 
I  have  been  paid  by  concerns  to  do  it — but  I  am  sure 
that  if  I  were  still  in  the  field  the  monotonous  setting 
down  of  minute  facts,  figures,  and  statistics  would 
be  disagreeable.  But  I  know  that  proper  blanks, 
properly  handled  by  salesmen  and  sales  managers, 
are  the  foundation  for  sales  methods  that  will  secure 
results  far  beyond  the  ability  of  any  isolated  salesman. 

"I've  been  on  both  sides  of  the  fence — that  of  the 
salesman  and  that  of  the  sales  manager.  And  no  sales 
manager  can  get  salesmen  to  send  in  reports  unless  he 
understands  their  work  in  detail  and  their  emotional 
experiences  as  they  do  their  work. 

"I  know  how  the  salesman  feels  after  sitting  for 
weary  hours  humped  up  in  water-tank  stations  and 
jerk-water  trains,  in  order  to  make  connections  and 
jumps  at  unearthly  hours  from  one  bush-league  town 
to  another — how  it  hits  him  suddenly  to  remember 
that  he  must  immediately  write  down  and  mail  to 
the  house  a  full  account  of  the  day's  wearisome  struggle 
with  buyers,  with  a  detailed  statement  of  every  failure 
made  and  reasons  therefor.  I  know  the  thoughts 
that  come  to  a  man  at  such  moments.  Yet  I'm 
hanged  if  I'd  want  to  sell  for  a  concern  which  didn't 
demand  reports.  And  every  salesman  who  has  ever 
sold  for  a  concern  which  knows  how  to  use  reports 
feels  the  same  way.    Sales  managers  can  bank  on  it. 

"Managers  must  consider  carefully  the  type  of 
man  a  salesman  is  if  they  want  to  get  results  from  him. 
The  modern  salesman,  unlike  the  men  who  used  to  go 
on  the  road,  is  no  mere  fountain  of  words.  Never- 
theless, his  mental  make-up  is  different  from  that  of 
most  men  in  business.  His  chief  qualities  are  those 
of  action,  not  of  reflection,  and  he  has  the  defects  of 
his  virtues.  Primarily  a  first-class  fighting  man,  when 
the  scrap  is  over  he  is  irritable,  impatient  of  details — 
intolerant  of  clerical  work  to  the  highest  degree. 


' 

2 

1w 

3 

4 

5 

6 

7 

8 

3w 

9 

10 

11 

4w 

12 

R    (^Jly^   Hdw.      Spg.      Drug      SU.      Gt«- F 
^      D.Gds.  Qnt.     Dept. 

E 

c^M^^-^)        CU/y 

M             rf               Cliar. 
Rating '^^^aOtfy^y        Tr.dS 

__,^_  Slate                             County                             Town 
r->/%yv»/«iy   Q'PjJ^£ccf.       ^enlO/lMI^^         Of   <Zl 

Bus-Like                                          Grade 
Mgmnt.  -V^^       Loc.dZ,HrZ      Wind«f^ 

Adv.      (I                    (7                          // 
Used     ^i=t~  /?.>i^ 

1       street                                      Buyer 
Jobber 

/ 
Avail                                         Essentl. 

Handles   and  Pushes      ^^ 

Date 

Att. 
Fr 

Trio 
Ord 

D'l'rs.Viewp'l 
Disp?  Push? 
Wlly  not  ours 

J 

When  Chance 

Cki-op  Office 
1      Sales  Effort      | 

Y 

T 

E 

J  ^ 

/I  R  V 

1/ 

N   N 
AT  A 

H  AN 
T  AT 

W 
AT 

P 

Olheri 

MQ 

D 

YR. 

Dale 

'i^'."%P-- 

Done 

1 

r 

19 

If 

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*-(/>2A<l^ 

, 

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2 

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^    / 

2 

3 

r 

iC 

/ 

3 

4 

> 

/ 

4 

fi 

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r- 

5 

fi 

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7 



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12 

13 

13 

14 

o 

14 

fB 

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; 

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^ 

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J 

15 

Figure  15:  Valuable  information  concerning  dealers  is  seciired  for  one 
concern  by  its  salesmen  through  cards  similar  to  this.  All  lines  handled 
and  pushed  are  indicated,  as  well  as  data  on  the  store  management. 


Name 

Date  Called 

Address 

City 

Business 

Buyers  Name 

Use 

For 

Size 

Will  Last 

Appear  Satisfied 

Demonstrated 

Quoted 

Remarks 

iVIake  a  separate  report  for  each  system  used  or  recommended. 
Write  additional  remarks  on  reverse  side. 

Figure  16:  When  a  salesman  for  one  concern  finds  a  prospect  already 
supplied,  he  notes  the  facts  upon  this  card,  which  is  filed  at  the  main 
office.     It  acts  as  a  reminder  to  the  salesman  to  call  at  a  future  date* 

28 


WHAT  ABOUT  REPORTS?  29 

"He  will  charge  a  fortress  in  the  face  of  a  withering 
fire;  but  he  feels  hke  running  when  asked  to  check 
over  the  items  in  a  wagonload  of  supplies.  Still,  if  he 
has  been  properly  trained,  he  knows  that  the  com- 
missary department  is  as  essential  to  the  success  of 
an  arm}''  as  brave  shock  troops. 

''He  has  no  respect  for  a  sales  manager  who  does 
not  keep  himself  and  the  organization  informed  of 
conditions,  who  does  not  get  the  right  kind  of  reports, 
analyze  them,  draw  helpful  conclusions  from  them,  and 
use  the  conclusions  to  advantage. 

"Sales  managers  who  have  not  the  courage  and 
initiative  to  call  for  reports,  to  compile  and  to  analyze 
data  from  them,  and  then  to  make  their  conclusions 
the  foundations  of  policies,  ar  not  respected.  Far 
from  gaining  popularity,  such  sales  managers  often  are 
called  'mossbacks'  and  'sleepers'  by  their  men.  A 
salesman  wants  to  know  that  his  manager  is  wide- 
awake— demands  that  he  be  full  of  aggressiveness  and 
initiative — constantly  starting  new  things,  and  he 
feejs  confident  of  a  bigger  future  in  a  concern  which 
has  such  a  man  at  its  helm. 

"The  wise  sales  manager,  having  himself  been  a 
salesman,  knows  these  facts  and  governs  himself 
accordingly.  He  is  not  afraid  to  put  out  any  set  of 
report  blanks,  provided  he  can  show  his  men  that  the 
filling  out  of  these  blanks  by  individuals  will  enable 
the  home  office,  by  getting  first-hand  knowledge  of 
conditions  on  all  fronts,  to  devise  plans  that  will 
make  the  work  of  each  individual  salesman  easier. 

"He  is  never  timid  in  insisting  on  the  prompt 
receipt  of  reports,  because  he  knows  that  his  men  have 
brains  enough  to  see  that  a  concern  which  works  in 
such  a  way  is  alert  and  far-seeing;  that  it  is  going  to 
lead  competitors  and  is  a  good  concern  to  work  for. 

"Modern  salesmen  are  not  children.  Once  show 
them  that  any  report  system  is  for  the  good  of  the 


30  BOOSTING  THE  SALES  VOLUME 

entire  sales  force  and  they  will  gladly  cooperate  in 
making  the  reports  effective.  But  they  insist  on  know- 
ing that  the  facts  which  they  put  into  the  reports  are 
compiled,  analyzed,  and  results  put  into  action. 

*'Make  salesmen  see  that  if  many  men  report  dismal 
failures  for  the  same  causes — that  if  enough  men  say 
the  customers  claim  the  price  is  too  high,  or  that  the 
quality  of  the  goods  is  too  poor — this  information  in 
their  reports  will  be  a  factor  in  determining  the  policy 
of  the  house.  Then  they  will  look  upon  filling  out 
reports,  not  as  punishment  to  be  endured,  but  as  an 
opportunity  to  be  embraced. 

THESE  POINTS,  WHEN  EMPHASIZED  TO  SALESMEN,  HELP 
INCREASE  THE  VALUE  OF  REPORTS 

"What  a  salesman  objects  to  at  the  bottom  of  his 
heart  is  not  the  necessity  for  making  out  reports,  but 
the  feehng  that  the  information  which  he  and  his 
fellows  send  in  is  called  for  merely  as  a  question  of 
routine — that  it  will  not  be  compiled  and  analyzed 
and  acted  upon  by  the  concern.  Then  a  report  system 
appears  to  him  as  tyranny  of  the  worst  sort. 

"Never  tell  a  salesman  to  set  about  a  task  merely 
because  you  have  the  authority  to  issue  orders.  Give 
him  reasons  for  your  action,  prove  to  him  that  the 
action  is  for  the  good  of  the  force  as  a  whole,  and  he 
will  not  only  acquiesce  himself,  but  will  back  your 
policy  to  the  limit.  But  having  once  given  reasons 
and  issued  orders,  then  hold  every  individual  salesman 
up  to  obeying  those  orders  implicitly. 

"Make  your  men  realize  that  report  blanks  pur- 
posely are  made  curt — that  their  apparently  dry 
statistical  appearance  is  a  matter  of  intention — that 
they  are  designed  to  contain  as  much  concentrated 
information  in  as  small  a  space  as  possible — that  their 
rigidity — the  system  and  method  insisted  upon  in 
filling  them  out — is  necessary:   first,  to  save  as  much 


SALESMAN'S  REPORT 

Salesman Date 19. 

rirm Buyer Town Stale 

It  a  Line  Yaid  Dealer,  give  name  and  address  of  Home  Office 


Pealer  [~]        Dealer  our  Line  Exclusive  ["]          Contractor  r~\         Consumer  r~\        Put>lic  Official  J~] 
Mfgr  rn      Dealer  also  Contractor  or  Cons,  rn    Architect  ri     Enflineer  r~\    Public  Commissioner   r] 
If  a  dealer,  how  does  he  rank  with  other  dealers  in  town?    Answer:  1st  ["]  2d  n  3rd  r~\ 
Has  dealer  switch  into  his  yard? If  so,  what  road? 


Does  he  take  team  traik  delivery? If  so,  what  road7_ 

Preference  as  to  delivery,  if  any 


Average  No.  of  barrels  handled  per  year? Warehouse  storage  capacity  for  how  many  carE?_ 

If  handling  our  brand  with  other  brands,  what  percentage  of  business  are  we  getting? 

If  not  handling  our  brand  what  are  our  prospects? 


What    brand    being    pushed? If  competitive  brand,  why?_ 


I  quoted  $ Competitors  quoting. 


Received  order  for Has  in  stock bbis Should  beinmarkef. 


ts  dealer  well  supplied  with  advertising  material? Does  he  use  it?_ 

What  form  of  advertising  does  he  prefer? 


Is  warehouse  sign-Old  r~]  New  r~l  Displayed, Yes  |~l  No  [~]  Is  it  in  good  condition?  r-j  Yes  r]  Norn 
II   a  Line    Yard,    do  they  operate  a  silo  or  elevator  construction  'It^^'™"''? 


If  consumer  or  contractor,  from  whom  does  he  hny?  '^"'y 

REMARKS: 


Figure  17:  A  report  like  this  one  not  only  shows  the  amount  of  the 
order,  but  gives  complete  information  about  the  dealer  as  well.  This 
includes  his  standing  compared  with  other  dealers;  arrangement  of  his 
switching  and  side-track  facilities;  his  delivery  system;  and  so  on. 

31 


COMPARATIVE   NET   REVENUE    FROM   SALESMAN 

Vonr                        SnloKmnn 

Class  of 
Goods 

Total  Sales 

Direct 
Cost 

Gross 
Revenue 

Expense  of  Selling 

Net  Revenue  from 
Sales 

Cost 

Selling 
Price 

Freight 

Salary 

and 

so 

forth 

Travel 

Miscel- 
laneous 

Total 

Percent- 
age of 
Sales 

Percent- 
age of 
Direct 
Cost 

Per 

Unit 

Total 

A 

lMo(\<^ 

■3(}Oo'^ 

■  Of 

iLoo"^ 

\7S- 

^^ 

ifo.n 

Uc 

Wl(h^ 

3/f. 

73^. 

B 

/ 

c 

D 

E 

F 

G 

Totals 

Figure  18:  This  form  gives  the  comparative  net  revenue  from  each 
salesman  of  one  concern.  It  can  be  used  over  an  entire  year,  and 
enables  the  management  to  pass  judgment  accurately  upon  the  value. 


SALESMEN'S  V/EEKLY  EXPENSE  REPORT  WEEK  EHDINGJ^kzCai^aTliaiy 

Date 

Break- 
fast 

Din- 
ner 

Sup- 
per 

Total 
Meals 

Bed 

Total 

Rail- 
road 

Laun- 
dry 

Bus 

Miscel- 
laneous 

Miscel- 
laneous 

Total 

Sales 

% 

Sunday 

.35- 

.TT 

MO 

1-70 

ZbO 

3.7d 

3.7a 

Monday 

.35- 

SO 

SO 

I.3S- 

166 

335 

/.7S 

.2i" 

.^r 

6M 

^a.0 

% 

Tuesday 

Wednesday 

Thursday 

Friday 

Saturday 

Total 

Cash  on  ha 

id    $ 

Expenses  fo 

r  week 
linnrt  , 

Balance  on 

c 

3 

c 

:> 

0 

Figure  19:  One  concern's  weekly  expense  report  for  salesmen  is 
reproduced  here.  The  simplicity  of  this  sheet  wins  favor  for  it  from 
^usy  salesmen.    Sales  are  given,  and  the  percentage  cost  of  selling. 

32 


WHAT  ABOUT  REPORTS?  33 

as  possible  of  the  salesman's  time  and  labor;  and, 
second,  to  save  the  concern  labor  and  cost  in  handling 
them,  and  thereby  to  make  possible  a  saving  in  over- 
head expense,  and  to  leave  more  money  to  be  paid  to 
the  salesmen  in  salaries  and  commissions. 

"Usually  several  types  of  daily  reports  are  required. 
Just  as  many  houses  print  upon  the  top  of  each  sheet 
of  paper  on  a  memorandum  pad,  'Take  up  only  one 
subject  on  this  sheet,'  so  it  often  reduces  confusion  if 
a  salesman  makes  reports  of  different  sorts  upon 
blanks  differently  designed. 

''For  instance,  there  may  be  the  daily  report  blank 
on  which  the  salesman  reports  the  time  he  arrives  in 
a  town,  where  he  may  be  reached  during  each  of  the 
following  two  or  three  days,  the  dealers  called  upon 
successfully,  dealers  called  upon  without  success, 
reasons  for  failure  to  secure  orders,  the  condition  of 
stock  of  each  dealer  called  upon,  advertising  material 
left,  advertising  material  which  the  concern  should 
mail,  when  each  dealer  called  upon  will  be  in  the 
market,  prices  and  terms  offered,  estimated  amount 
of  goods  in  'our'  Hne,  what  lines  the  dealers  push 
hardest  and  why,  whether  or  not  a  dealer  advertises, 
what  estimated  percentage  of  a  dealer's  consumption 
is  furnished  by  'us'  and  what  percentage  by  com- 
petitors, names  of  competitors,  reasons  why  the 
competitors  are  preferred,  and — with  reasons — names 
of  dealers  not  called  upon. 

"A  second  type  of  report  might  be  made  out  when  a 
salesman  'made'  a  town  for  the  first  time.  Often  it 
might  be  to  the  advantage  of  the  concern  to  know  the 
population  of  the  town,  the  class  and  racial  type  of  the 
population  and  that  of  the  surrounding  country  buying 
in  the  town's  local  stores — whether  agricultural  or 
industrial,  whether  dealers  occupied  stores,  offices,  or 
warehouses,  whether  they  were  located  on  corners, 
main  or  side  streets;  the  appearance  (whether  good, 


34  BOOSTING  THE  SALES  VOLUME 

average  or  indifferent)  of  each  dealer's  place  of  business, 
the  type  of  the  management  (aggressive  and  up  to 
date,  or  conservative),  whether  or  not  the  town  made 
large  or  small  sales  of  goods  in  'our'  lines,  the  name 
of  the  buyer  for  each  dealer;  a  size-up  of  his  character- 
istics; each  dealer's  local  reputation  for  paying ;  refer- 
ences (persons  of  whom  the  salesman  inquired)  on 
new  firms  in  the  town  or  towns. 

"Another  report  blank  might  be  used  for  salesmen's 
expenses — railroad  fare,  Pullman  car,  meals  on  the 
train,  hotel  expenses  for  room  and  meals,  taxi  or  bus 
hire,  and  baggage  expense. 

"Many  concerns,  needing  but  little  information  of 
each  type,  are  able  to  make  out  report  forms  which 
will  contain  on  one  card  all  of  the  information  they 
need.  But  no  matter  how  much  or  how  little  infor- 
mation a  concern  asks  from  its  men,  it  should  let  them 
know  that  it  notes  all  the  information  they  send  in — 
that  it  never  asks  for  a  point  that  will  not  help.  It 
is  only  by  so  doing  that  it  can  secure  the  full  co- 
operation of  its  men  on  the  road." 

This  sales  manager  has  mentioned  the  possibihties 
contained  in  reports  on  customers  and  prospects — the 
third  of  the  classes  under  which  we  are  considering 
salesmen's  reports  in  this  section. 

In  one  clothing-manufacturing  concern  each  prospect 
who  wishes  to  handle  the  line  is  asked  to  fill  out  the 
report  card  shown  in  Figure  13.  This  is  a  4-by-6- 
inch  yellow  card.  A  blue  card  of  the  same  size,  shown 
in  Figure  14,  is  filled  out  by  the  salesmen. 

One  je^'elry  concern  asks  its  salesmen  to  furnish 
detailed  information  on  the  form  shown  in  Figure  15. 
One  of  the  valuable  features  of  this  report  is  that  it 
requires  only  checking  by  the  salesman  and  is  there- 
fore easily  filled  out  in  a  short  time. 

The  sales  manager  of  one  concern  which  makes  a 
high-priced  specialty  has  devised  a  simple  customer 


WHAT  ABOUT  REPORTS?  35 

report  (Figure  16)  which  shows  what  model  of  machine 
the  customer  or  prospect  is  now  using  and  about  when 
he  will  be  in  the  market  for  a  new  machine.  These 
reports  serve  as  a  follow-up  and  enable  the  company 
to  remind  salesmen  when  to  call  again. 

Salesmen's  reports  for  another  concern  not  only  show 
the  amount  of  the  order  sold  but  also  classify  the 
customer  according  to  his  Une  of  business,  his  standing 
in  his  community,  the  average  amount  of  his  business, 
brands  of  goods  handled,  and  the  amount  of  adver- 
tising done.     One  report  is  shown  in  Figure  17. 

In  this  section,  then,  has  been  described  how  many 
successful  concerns  obtain  effective  records  of  their 
sales  and  expenses,  and  how  they  get  a  line  on  their 
customer's  business.  Also  we  have  seen  how  sales 
managers  handle  this  reporting  to  overcome  the  preju- 
dice many  salesmen  have  against  doing  the  necessary 
clerical  work  attached.  The  fullest  value  of  these 
records  cannot  be  obtained,  however,  unless  a  concern 
has  some  sort  of  record  which  will  show  the  comparative 
net  revenue  from  each  salesman.  Such  a  record 
(Figure  18)  has  been  of  immense  value  to  one  firm  in 
determining  the  exact  worth  of  each  man  on  the  road. 

In  closing,  perhaps  we  could  sum  up  the  situation 
no  more  logically  than  by  requoting  from  the  sales 
manager  who  says  on  page  29 : 

*' Sales  managers  who  have  not  the  courage  and 
initiative  to  call  for  reports,  to  compile  and  to  analyze 
data  from  them,  and  then  to  make  their  conclusions 
the  foundations  of  policies,  are  not  respected.  Far 
from  gaining  popularity,  such  sales  managers  often  are 
called  'mossbacks'  and  'sleepers'  by  their  men.  A 
salesman  wants  to  know  that  his  manager  is  wide- 
awake— demands  that  he  be  full  of  aggressiveness  and 
initiative — constantly  starting  new  things,  and  he 
feels  confident  of  a  bigger  future  in  a  concern  which 
has  such  a  man  at  its  helm." 


"P\URING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbolize  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  Publica- 
tions are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  knvw 
so  well  during  the  war. 


Wi-  -s 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
of  the  A.  W.  SHAW  COMPANY 


SECTION  6 
Do  Sales  Contests  Really  Pay? 


DO  SALES  CONTESTS  REALLY  PAY? 

TO  do  away  with  what  had  come  to  be  regarded 
as  an  unavoidable  depression  in  business  during 
the  summer  months,  a  manufacturer  of  office 
furniture  decided  to  stage  a  summer  contest  for 
dealers  and  dealers'  salesmen.  He  held  the  firm  con- 
viction that  there  was  no  need  for  a  great  falling  off 
in  business  during  the  summer  months. 

During  the  first  summer  the  contest  was  held  there 
was  a  marked  increase  in  sales,  but  the  results  the 
second  year  were  even  more  remarkable.  June,  July, 
and  August  were  the  months  selected  for  the  drive  to 
increase  business.  In  June  of  the  second  year  the 
sales  doubled  over  those  in  June  of  the  first  year,  and 
were  20%  greater  than  any  previous  month  in  the 
history  of  the  company.  The  winning  dealer  made 
694%  of  his  quota.  In  July,  dealer  sales  showed  an 
increase  of  $55,000  over  the  sales  of  July  the  previous 
year.  August  was  another  record-breaking  month — 
the  winning  dealer  making  822%  of  his  quota.  These 
gains  are  shown  in  graphic  form  in  Figure  41. 

This  contest  proved  to  the  company  the  value  of  a 
determined  drive  to  push  sales  during  the  dull  season, 
and  it  is  for  this  purpose  that  business  men  find  the 
sales  contest  most  useful,  investigation  indicates, 
although  another  purpose  for  which  it  is  generally 
used  is  to  secure  a  wider  distribution  of  products. 

We  may  then,  for  purposes  of  discussion,  classify  sales 
contests  as  follows: 

75 

Copyright,  1921,  by 

A.  W.  SHAW  COMPA^fY 

as  a  part  of  the  Shaw  Sellins  Series 


76  BOOSTING  THE  SALES  VOLUME 

L    Dull-season  sales  contests 
a    For  dealers 
b    For  salesmen 

1.  Based  on  current  events 

2.  Based  on  love  of  sports 

3.  Based  on  salesman's  pride 

IL    Wider-distribution  contests 

In  beginning  our  discussion  of  the  first  of  these 
classes  of  sales  contests,  let  us  go  back  and  see  what 
made  the  dull-season  sales  contest — the  one  men- 
tioned at  the  beginning  of  the  section — so  successful. 
The  two  big  factors  in  its  success  were  the  carefully 
worked-out  methods  for  keeping  interest  at  a  high 
pitch,  and  the  unbounded  energy  of  the  advertising 
manager,  who  had  the  contest  in  charge. 

To  begin  with — as  an  "appetizer"  for  dealers — 
the  company  held  a  better-business  show  during 
March  and  April.  A  first  prize  of  $75  and  a  second  of 
$50  were  given  to  the  two  dealers  getting  up  the  best 
window  displays  during  the  show.  In  addition,  20 
prizes  of  $10  each  were  given  to  dealers'  salesmen  who 
made  the  largest  individual  sale  which  could  be  at- 
tributed directly  to  his  employer's  window  display. 
Prizes  also  were  given  salesmen  for  the  largest  number 
of  sales  of  all  goods  and  for  the  largest  total  amount  of 
sales  of  goods  shown  in  the  windows. 

This  plan  in  itself  increased  sales,  but  its  chief  object 
was  to  arouse  dealers  and  their  salesmen  for  the  real 
contest  which  followed.  The  big  contest  began  on 
June   1.     Of  325  dealers,   278  were  eligible. 

''Experience  had  shown  us,"  said  the  advertising 
manager,  **that  merchandise  prizes  are  more  eagerly 
sought  after  than  cash  prizes.  Therefore,  for  the  first 
month  we  offered  these  six  prizes:  First,  a  watch; 
second,  a  traveling  bag;  third,  a  camera;  fourth,  a 
salesmen's  portfolio;  fifth,  a  safety  razor;  and,  sixth, 
a  folding  umbrella  of  practical  design. 


DO  SALES  CONTESTS  PAY? 


77 


"These  went  to  the  dealers'  salesmen  and  proved 
such  popular  prizes  that  we  duplicated  them  for  the 
July  and  August  contests.  And  in  the  fact  that  we 
ofifered  prizes  for  each  month's  work  instead  of  more 
valuable  prizes  for  the  entire  three  months'  contest 
period  hes  one  of  the  secrets  of  our  success.    I  do  not 


Made  Annou 

June  1916 
June  1917 
July  1916 
July  1917 
August  1916 
August  1917 

ncement  of  the  Fall  Campaign  of  Advertising 

'    :-,.^55:*;-:^;=»i^K.-.:S-M-;-Wl 

' 

Results  of  second  summer  contest. 

Figure  41:  When  summer  sales  fell  below  the  year's  average,  one 
manager  staged  a  summer  sales  contest.  This  figure  shows  the  increases 
during  the  contest  months  over  the  same  period  in  the  previous  year. 

believe  it  is  possible  to  sustain  continued  interest  in  a 
contest  over  a  longer  period  than  one  month." 

In  addition  to  the  prizes  for  the  dealers'  salesmen, 
each  month  cash  prizes  of  $25,  $10,  and  S5  were  given 
to  the  dealers  having  the  best  window  displays.  Also, 
each  dealer  who  made  100%  of  his  quota  for  the 
three  months  received  a  gold  button  inscribed  with 
his  name,  the  name  of  the  company,  and  100%. 

To  keep  the  company's  own  salesmen  from  feeling 
entirely  out  of  it,  five  cash  prizes  each  month  of  $35, 
$25,  $20,  $15,  and  $10  were  given  to  its  salesmen 


78  BOOSTING  THE  SALES  VOLUME 

turning  in  the  largest  percentage  of  their  quota  for 
these  months.  Sales  made  through  agencies  in  the 
territories  were  credited  to  each  salesman. 

Interest  in  the  contest  was  kept  at  a  high  pitch 
through  a  four-page  house-organ  ''newspaper"  pub- 
lished each  week.  The  style  followed  was  that  of  the 
so-called  sensational  newspapers.  Big,  black  headlines 
announced  the  names  of  the  leading  dealers  and  sales- 
men. Photographs  of  the  leaders  in  the  race  appeared 
on  the  front  page.  On  the  inside  page  of  each  issue 
were  listed  the  prizes  and  contest  announcements. 

Of  course,  the  standings  of  the  dealers,  dealers' 
salesmen  and  company  salesmen  also  were  announced. 

"In  this  connection  we  discovered  an  interesting 
psychological  fact,"  declared  the  advertising  manager. 
"At  first  we  gave  all  the  standing  in  percentages.  We 
soon  found,  however,  that  some  of  the  dealers  did 
not  understand  this  method  fully.  So  we  changed  and 
gave  the  standing  of  the  dealers  and  their  salesmen  in 
one,  two,  three  order.  There  was  an  immediate  jump 
in  interest.  We  left  the  standings  of  our  own  salesmen 
in  percentages  as  they  were  familiar  with  that  method 
and  preferred  it  to  the  actual  sales  figures." 

THIS  NOVEL  PLAN  NO  DOUBT  CAN  BE  USED  TO  ADVANTAGE 
BY  CONCERNS  IN  MANY  DIFFERENT  LINES 

Still  another  feature  which  added  a  strong  human- 
interest  touch  and  served  to  furnish  a  ''high  light" 
during  the  month  was  the  plan  of  naming  each  month's 
contest  after  some  one  of  the  company's  officials.  It  so 
happened  that  the  sales  manager  had  a  birthday  the 
middle  of  June,  the  secretary  one  in  July,  and  the 
advertising  manager  one  in  August. 

All  these  men  were  well  known  to  many  of  the  dealers. 
So  June  was  made  "Bob"  Tucker's  month.  All  the 
sales  talk  in  the  house-organ  "newspaper"  was  based 
on  the  plea  of  piling  up  a  big  volume  of  sales  for  him. 


DO  SALES  CONTESTS  PAY?  79 

On  his  anniversary  day  a  special  effort  was  made  to 
celebrate  "Tucker's  day"  with  big  sales. 

That  the  plan  was  successful  was  indicated  by  the 
flood  of  telegraph  orders  which  came  in  on  that  and 
the  following  day.  The  sales  for  the  day  itself  were 
far  ahead  of  the  sales  for  any  other  day  during  the 
month.  The  same  plan  was  carried  out  successfully  in 
connection  with  the  secretary's  and  the  advertising 
manager's  birthdays  the  following  months. 

During  the  three  months  of  the  contest  the  company 
made  three  direct  mailings  to  lists  of  prospects  fur- 
nished by  the  dealers.  These  mailings  went  out  on 
May  26,  June  25,  and  July  25,  and  called  the  attention 
of  prospects  to  the  goods  and  to  the  national  advertis- 
ing which  was  appearing  at  the  same  time.  An  indirect 
but  valuable  result  of  the  contest  was  the  increasing 
of  the  mailing  list  from  11,000  to  60,000  names. 

In  the  last  contest  number  of  the  weekly  house- 
organ  "newspaper,"  photographs  of  all  the  prize 
winners  were  pubhshed,  and  a  large  display  advertise- 
ment announced  plans  for  the  fall  advertising  cam- 
paign of  the  company  and  gave  the  dealers  a  hint  to 
get  a  start  after  the  fall  business. 

Another  summer  contest  for  dealers  which  brought 
big  returns  was  carried  out  by  a  concern  which  manu- 
factures a  medium-priced  machine  specialty.  This 
contest  was  conducted  on  a  quota  basis,  each  dealer 
being  given  a  quota  based  on  previous  sales.  The 
standing  was  determined  by  the  percentage  of  the 
quota  sold  by  each  dealer: 

Dealers  were  divided  into  two  classes,  "A"  and  "B," 
according  to  the  size  of  their  business.  Cash  prizes 
totaling  $1,275  were  offered  to  the  two  classes,  divided 
as  follows; 

Class  A:  First  prize,  $500;  second,  $200;  third,  $100; 
fourth,  $50. 


80  BOOSTING  THE  SALES  VOLUME 

Class  B:  First  prize,  $250;  second,  $100;  third,  $50; 
fourth,  $25. 

The  contest  lasted  six  weeks.  Interest  was  kept  up 
by  a  daily  bulletin.  In  it  standings  were  given  in 
percentages  of  quotas,  and  mail  and  telegraph  orders 
also  were  reproduced  from  time  to  time. 

During  the  first  week  one  dealer  sold  33%  of  his 
quota,  another  27%,  and  a  third  25%.  At  the  begin- 
ning of  the  final  week  one  dealer  had  sold  106%  of  his 
quota.  The  winning  dealer  in  Class  A  sold  204%  of 
his  quota — more  than  he  had  sold  in  the  preceding 
six  months.  The  winner  in  Class  E  sold  125%  of  his 
quota.  More  sales  were  made  in  one  city  during  the 
last  week  of  the  contest  than  in  any  other  preceding 
month  in  the  history  of  the  company. 

General  results  show  that  July  sales  increased  20% 
over  June  and  August  sales  17%  over  July.  August 
was  the  fourth  largest  month  in  the  history  of  the 
company.  This  contest  also  was  followed  by  an 
intensive  fall  advertising  campaign. 

Valuable  as  these  dealer  contests  appear  to  be, 
investigation  indicates  that  manufacturers  and  whole- 
salers generally  lean  more  strongly  toward  contests 
for  their  own  salesmen  as  a  means  of  developing  busi- 
ness during  the  dull  seasons.  The  experience  of  many 
sales  managers  is  that  to  keep  salesmen's  interest  in 
contests  keyed  to  a  high  pitch  it  is  necessary  to  tie  the 
contests  up  to  some  current  event  or  to  appeal  to 
their  love  of  sport  or  their  pride. 

A  contest  based  on  interest  in  a  presidential  election 
proved  a  business-getter  for  one  wholesaler.  Six  weeks 
before  the  election  the  company  published  a  notice  in 
the  salesmen's  bulletin  calling  attention  to  the  fact 
that  the  country  would  elect  a  president  in  six  weeks. 

**  Let's  beat  the  people  to  it,"  wrote  the  sales  man- 
ager,   "and   choose   the   president   in   a   preelection 


DO  SALES  CONTESTS  PAY?  81 

contest.  Polls  will  open  October  1 ;  close  October  3. 
Get  your  votes  in  early." 

This  was  the  plan:  Each  division  manager,  branch 
manager,  and  salesman  was  asked  to  fill  out  a  "vote" 
form  indicating  his  choice  for  president.  These  blanks 
were  all  to  be  in  before  October  1. 

At  the  end  of  each  week  the  total  business  done  by 
the  sales  organization  was  taken  as  100%.  Then  it 
was  divided  between  the  candidates.  If  a  salesman 
was  a  Wilson  man  according  to  his  "vote,"  every 
order  he  sent  in  was  credited  to  the  Wilson  vote  on 
the  percentage  basis.  On  every  order  sent  in  during 
October  the  salesmen  wrote  the  name  of  the  candidate 
to  whose  credit  he  wanted  the  order  placed. 

This  plan  met  with  an  enthusiastic  response  because 
most  of  the  salesmen  were  interested  in  political 
affairs,  and  linking  their  work  with  the  national  event 
caught  their  fancy  in  a  decisive  way. 

HERE'S  A  HELPFUL  CONTEST  PLAN  THAT  INCREASED  ONE 
FIRM'S  BUSINESS  60%  IN  ONE  YEAR 

One  firm  used  a  "600-mile  automobile  race."  This 
contest  lasted  one  year — December  to  December — 
and  increased  business  6 )%  during  that  time. 

The  sales  manager  prepared  a  chart  showing  an 
automobile  race  track  with  a  judges'  stand,  starting 
posts,  a  pit,  grandstand,  and  all  other  equipment. 

Each  salesman  received  a  key  number  and  his 
standing  in  the  race  was  indicated  on  the  chart  by 
placing  his  number  in  a  circle  opposite  the  number  of 
miles  he  had  gone.  A  copy  of  this  chart  was  sent  to 
each  salesman  each  month  (Insert  III).  He  could 
see  easily  where  he  stood  and  could  compare  his 
standing  with  that  of  the  other  salesmen. 

In  determining  the  amount  of  sales  necessary  to 
advance  one  mile  on  the  track  the  sales  manager  took 
into  consideration  the  difference  in  outlets  for  the 


82  BOOSTING  THE  SALES  VOLUME 

company's  products,  the  comparative  size  of  the  sales 
to  each  class  of  business,  and  the  ease  of  sales. 

Careful  analysis  and  a  comparative  study  of  the 
sales  records  over  five  years  indicated  that  on  the 
whole  it  was  easier  to  sell  to  factories,  wholesale  houses, 
and  public  institutions  where  the  unit  of  sale  was 
larger,  than  to  sell  to  retail  stores.  More  sales  could 
be  made  to  retailers  but  the  unit  was  much  smaller. 

After  this  study  the  entire  hne  was  divided  into 
four  classifications  and  the  number  of  dollars'  worth 
of  sales  necessary  to  advance  one  mile  in  the  race  was 
determined  as  follows: 

Factory $150 

(Wholesale  oil,  public  institutions,  government) 

Dry  cleaning 100 

Retail 50 

Paint  oil 40 

"The  same  equipment  may  be  sold  to  these  four 
classes  of  business,"  said  the  sales  manager;  ''that  is 
a  salesman  can  sell  equipment  to  a  big  factory  which 
is  exactly  the  same  as  that  sold  to  retailers  and  so  on. 

"Nine  times  out  of  ten  our  experience  has  shown 
that  it  takes  a  salesman  longer  to  sell  a  factory  than 
it  does  to  sell  a  general  or  hardware  store.  In  selling 
a  factory  usually  it  is  necessary  for  the  salesman  to 
go  over  the  ground  and  conditions  surrounding  the 
handling  of  paint  oil,  lubricating  oil  and  gasoline,  by  a 
factory,  and  to  suggest  improvements  and  prepare 
detailed  drawings  showing  the  proposed  installations. 

"This,  of  course,  requires  considerable  time  and 
involves  expense.  Often  it  will  take  two  or  three 
weeks  and  sometimes  two  or  three  months  after  a 
proposal  of  this  sort  has  been  submitted  to  the  pur- 
chasing agent,  engineer  in  charge,  or  manager,  before 
a  definite  decision  regarding  the  purchase  is  made,  as 
in  most  instances,  the  cost  of  equipment  of  this  type 
runs  into  a  fairly  large  amount  of  money. 


?  83 

ng  to  grocers, 
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sell  a  much 
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INSERT  III:     One  sales  manager  worked   out  starting  posts,  a  pit,  grandstand,  and  so  on.     A 

Q  sales  contest  and  called  it  the  "600-mile  auto-  copy  of  this  chart  was  sent  each  month  to  every 

mobile  race."    He  prepared  this  chart,  showing  salesman  of  the  concern  during    the    contest, 

an  automobUe  race  track  with  a  judges'  stand,  The  appeal  to  the  salesman's  sporting  blood  was 


contagious,  and  every  man  redoubled  his  efforts.  compare  his  position  with  others  in  the  race. 
Each  salesman  was  given  a  key  number,  which  The  contest  lasted  one  entire  year — from  De- 
indicated  on  the  map  every  month  what  his  posi-  cember  to  December — and  the  business  of  the 
tion  in  the  contest  was.     Then  he  could  easily  company  increased  over  60%  during  that  time- 


DO  SALES  CONTESTS  PAY?  83 

"On  the  other  hand,  the  salesman  selHng  to  grocers, 
hardware  dealers,  and  the  like,  is  not  required  to 
spend  so  much  time  in  selling  the  equipment.  He  can 
usually  call  on  five  or  six  times  as  many  prospects  as 
the  factory  salesman.  At  the  same  time,  the  equip- 
ment he  sells  usually  involves  less  money. 

"We  consider  that  the  relative  mileage  basis  as 
worked  out  is  fair  to  the  salesmen  handling  all  four 
classes  of  business  as  a  regular  thing." 

The  grand  prize  awarded  to  every  salesman  who 
finished  in  the  race  was  a  trip  with  all  expenses  paid 
to  the  annual  convention  of  the  company  held  the 
last  of  December.  In  addition,  five  prizes  were  given 
to  the  five  salesmen  covering  the  greatest  amount  of 
mileage  on  the  track  and  a  sixth  prize  was  given  to 
the  salesman  obtaining  the  largest  total  volume  of 
business,  regardless  of  his  standing  on  the  track.  The 
branch  office  or  sales  division  selling  the  largest  per- 
centage of  its  previously  established  quota  received  a 
large  silver  loving  cup  at  the  finish. 

It  will  be  noted  that  on  the  basis  worked  out,  it  is 
possible  for  a  salesman  to  win  the  first  of  the  five 
grand  prizes  for  covering  the  greatest  distance  on  the 
track  and  still  not  be  in  the  running  for  the  prize  for 
the  largest  total  volume  of  business.  This  is  logical 
enough,  because  factory  salesmen  must  sell  a  much 
larger  volume  to  advance  a  mile  on  the  track  than 
salesmen  selling  to  retail  stores. 

In  order  to  help  keep  enthusiasm  at  a  high  pitch 
during  the  contest  the  company  published  a  house 
organ.  This  contained  comments  on  the  progress  of 
the  contest,  and  as  each  man  finished  his  race  his 
picture  and  a  write-up  of  his  ability  as  a  salesman 
appeared  in  the  next  issue. 

"If  this  600-mile  race  had  not  accomplished  any 
result  other  than  the  promotion  of  a  better  feeling 
among  our  salesmen  toward  the  men  in  their  own 


82 

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nans 


DO  SALES  CONTESTS  PAY?  83 

"On  the  other  hand,  the  salesman  selhng  to  grocers, 
hardware  dealers,  and  the  like,  is  not  required  to 
spend  so  much  time  in  selling  the  equipment.  He  can 
usually  call  on  five  or  six  times  as  many  prospects  as 
the  factory  salesman.  At  the  same  time,  the  equip- 
ment he  sells  usually  involves  less  money. 

"We  consider  that  the  relative  mileage  basis  as 
worked  out  is  fair  to  the  salesmen  handling  all  four 
classes  of  business  as  a  regular  thing." 

The  grand  prize  awarded  to  every  salesman  who 
finished  in  the  race  was  a  trip  with  all  expenses  paid 
to  the  annual  convention  of  the  company  held  the 
last  of  December.  In  addition,  five  prizes  were  given 
to  the  five  salesmen  covering  the  greatest  amount  of 
mileage  on  the  track  and  a  sixth  prize  was  given  to 
the  salesman  obtaining  the  largest  total  volume  of 
business,  regardless  of  his  standing  on  the  track.  The 
branch  office  or  sales  division  selling  the  largest  per- 
centage of  its  previously  established  quota  received  a 
large  silver  loving  cup  at  the  finish. 

It  will  be  noted  that  on  the  basis  worked  out,  it  is 
possible  for  a  salesman  to  win  the  first  of  the  five 
grand  prizes  for  covering  the  greatest  distance  on  the 
track  and  still  not  be  in  the  running  for  the  prize  for 
the  largest  total  volume  of  business.  This  is  logical 
enough,  because  factory  salesmen  must  sell  a  much 
larger  volume  to  advance  a  mile  on  the  track  than 
salesmen  selling  to  retail  stores. 

In  order  to  help  keep  enthusiasm  at  a  high  pitch 
during  the  contest  the  company  published  a  house 
organ.  This  contained  comments  on  the  progress  of 
the  contest,  and  as  each  man  finished  his  race  his 
picture  and  a  write-up  of  his  ability  as  a  salesman 
appeared  in  the  next  issue. 

"If  this  600-mile  race  had  not  accomplished  any 
result  other  than  the  promotion  of  a  better  feeling 
among  our  salesmen  toward  the  men  in  their  own 


84  BOOSTING  THE  SALES  VOLUME 

ranks  as  well  as  toward  the  company  in  general,  we 
would  consider  that  the  time  and  effort  had  been  well 
spent,"  declared  the  sales  manager  of  this  concern. 

Another  concern  took  advantage  of  the  love  of  sport 
among  its  salesmen  by  starting  a  football  contest. 
This  was  held  one  month  late  in  the  summer  and  gave 
the  organization  a  flying  start  after  fall  business. 

A  schedule  of  games  was  arranged  for  each  week  in 
the  month,  sales  teams  of  practically  equal  strength 
being  matched  against  each  other.  Each  $100  worth 
of  business  secured  constituted  a  goal.  The  six  teams 
in  the  race  were  divided  into  two  leagues,  designated 
asthe"school-of-experience  league"  andthe  "university- 
of -hard-knocks  league."  Interest  was  maintained  dur- 
ing the  contest  through  pink  ''sporting  extras"  in  the 
house  organ,  giving  the  score  by  quarters  and  the 
general  ''football  dope"  of  the  contest. 

THE  SALES  MANAGER  WAS  WORRIED  BUT  HE  GOT  OUT 
OF  THE  HOLE  WITH  THIS  CONTEST  PLAN 

Another  sales  manager — a  man  who  has  charge  of 
the  sales  of  a  sideline  for  a  concern  which  makes  a 
leader  of  a  high-priced  specialty — brought  baseball  to 
his  aid  at  a  time  when  sales  prospects  were  anything 
but  bright.  It  was  one  of  the  first  summers  of  the  war — 
before  the  United  States  was  in.  Conditions  made  it 
harder  to  get  orders  in  the  main  department  of  the 
business  and  many  of  the  salesmen  were  neglecting 
the  sideline  entirely.  The  sales  manager  was  worried — 
very  much  worried,  you  will  understand. 

He  says:  "Now  you  know  what  a  man  does  when  he 
is  worried  if  he  is  a  golfer.  I  did  it.  I  don't  remember 
whether  it  was  between  the  eighth  hole  and  the  ninth, 
or  between  the  eighteenth  and  the  nineteenth,  but  one 
Indian-summer  day  in  October  a  flash  came.  My 
golf  score  was  forgotten,  and  before  bed  time  I  had 
worked  out  a  little  war  game  all  my  own. 


DO  SALES  CONTESTS  PAY?  85 

"If  the  men  were  bound  to  worry  about  something, 
I  proposed  to  make  them  worry  about  each  other. 
I  had  noticed  that  baseball  extras  were  still  selling  to 
people  who  did  not  stop  to  read  the  war  bulletins. 
On  the  surface  cars,  elevated  and  subway,  I  saw  men 
skipping  red-ink  war  headings  to  read  how  the  Giants 
were  getting  on  with  the  Sox.  Here  was  something 
which  out-absorbed  war  with  many. 

"Twenty-four  hours  after  my  flash  I  was  launched 
as  a  baseball  magnate.  I  had  branch  offices  in  major- 
league  cities,  in  minor-league  cities,  and  in  the  bush. 
New  York,  Pittsburgh,  Chicago,  San  Francisco,  Phila- 
delphia, Boston,  St.  Louis,  and  Washington  were 
organized  into  a  major  league.  The  balance  of  my  56 
branch  offices  were  divided  into  groups  of  eight.  Each 
was  a  league  with  a  seven  months'  schedule  worked  out. 

"I  did  not  know  what  a  hornet's  nest  I  was  stirring 
up.  If  you  want  to  get  the  real  pulse  of  inter-city 
rivalry,  don't  go  to  the  chambers  of  commerce  or  the 
boards  of  aldermen  or  the  daily  press.  Consult  the 
branch  sales  managers  in  the  rival  towns.    I   know. 

"The  plan  was  this:  Each  game  lasted  a  month. 
Each  day  was  an  inning.  In  each  game  the  winner 
was  the  city  which  showed  the  greatest  percentage 
of  sales  increase  over  the  corresponding  month  of  the 
year  before.    It  was  a  simple  plan. 

"Each  league  operated  on  a  basis  of  its  own.  Each 
month  each  city  played  another  city  in  the  same  league. 
Seven  months  completed  the  schedule. 

"The  players — the  salesmen — on  the  championship 
team  in  each  league  were  to  receive  a  bonus  of  20% 
on  all  their  sales  in  excess  of  their  sales  for  the  cor- 
responding seven  months  in  the  preceding  year. 

"Now,  how  did  it  work? 

"Oklahoma  City,  on  reading  the  conditions,  wrote: 
*We  are  out  of  it.  Our  gains  last  year  were  too  big. 
We  are  stacked  against  too  strong  a  pace.    However, 


86  BOOSTING  THE  SALES  VOLUME 

we  are  going  to  try  not  to  do  any  worse  than  Cleveland 
did  in  the  American  league.' 

"Inter-city  'kidding'  matches — in  bleacher  slang — 
soon  had  the  56  teams  on  their  mettle. 

** Spokane  wrote:  'We  are  going  to  beat  that  short- 
grass  bunch  down  in  Wichita  if  we  have  to  work 
nights  to  do  it.'  Baltimore  promised  to  Hake  the  ice 
out  of  the  icebergs  in  Minneapolis.'  Boston  said: 
*We  don't  allow  much  talking  from  the  bench,  but 
keep  your  eye  on  the  scoreboard.'  New  Orleans  in- 
vited me  to  watch  their  smoke  all  the  time. 

"At  the  end  of  the  first  month  my  score  sheet 
showed  that  25  out  of  the  56  offices  had  shown  an 
increase  of  better  than  25%.  Poor  old  Baltimore,  with 
a  40%  increase,  took  the  loser's  end  of  the  guying 
from  Minneapolis,  v/ith  70%.  Scranton,  with  45% 
increase,  had  to  swallow  the  jibes  of  its  competitor  for 
the  month — Columbus,  with  90%  to  show. 

"Gains  didn't  count.  Games  were  the  only  criterion 
that  gave  the  branch  manager  a  right  to  live  in  the 
eyes  of  his  fellow  managers.  The  percentages  in  the 
different  leagues  appeared  in  my  baseball  extra, 
'Across  the  Field,'  which  went  out  to  the  sales  force. 

"  'Across  the  Field'  showed  cartoons  of  the  demon 
pitcher  for  Detroit,  the  two  lady  pitchers  from  the 
Middle  West  and  the  national  commission — with 
prods  and  jibes  contributed  by  winners  and  losers. 

"It  was  a  publication  without  dignity.  It  out- 
heralded  the  news  headlines  in  typography.  Pitts- 
burgh players,  at  the  bottom  of  Group  1,  with  a  per- 
centage of  0.000,  had  to  grind  their  teeth  for  the  next 
30  days  while  they  looked  at  Philadelphia  at  the  top 
of  the  list  with  1,000.  But  they  had  their  turn.  Soon 
down  came  Philadelphia  and  up  went  Pittsburgh. 

"The  agony  of  being  at  the  bottom  of  the  league,  I 
believe,  was  never  felt  by  a  professional  ball  club  as  it 
was  felt  by  these  managers  and  players  who  saw  their 


WHAT   MAKES   SALESMEN  WORK 
HARDEST 

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I    - 

Figure  42 :  A  baseball  contest  was  successfully  worked  into  one  selling 
organization,  and  sales  increased  over  lOSc  in  a  month.  Eight  cities 
were  organized  into  a  major  league.  Each  "game"  lasted  a  month, 
and  every  day  was  an  inning.     This  figure   shows  the  score  card. 

87 


88  BOOSTING  THE  SALES  VOLUME 

names  and  records  put  down  in  irrefutable  percentages 
of  won  and  lost,  up  and  down. 

"After  losing  two  games  running,  the  Richmond 
manager  asked  his  men  in  a  Napoleonic  bulletin  'if 
they  had  any  fighting  blood  in  them.'  They  answered, 
'Yes!'  in  the  next  game,  at  the  expense  of  a  southern 
neighbor  which  put  up  a  good  fight. 

"In  all  my  experience  with  selling  I  have  never 
seen  such  enthusiasm  over  business-getting.  It  was 
no  longer  business.  It  was  sport.  A  man's  honor  was 
at  stake.  The  city's  honor  was  at  stake.  And  the 
manager  was  there  to  see  that  honor  was  not  lost 
without  a  bulldog  struggle  to  win. 

WITH  THIS  TESTED  PLAN  EVEN  THE  LOSERS  HAD  A  CHANCE 
IN  THE  LONG  RUN  TO  WIN  SOMETHING 

"Of  course,  after  a  few  games  each  league  had  its 
trailers.  To  provide  a  stimulus  for  these  also-rans,  we 
promised  a  place  in  the  national  championship  league 
to  one  team  which  would  be  chosen  by  the  national 
commission  on  the  strength  of  their  all-around  work. 
The  national  champion  was  to  get  a  cup.  I  found  that 
many  teams  ranking  low  in  their  respective  leagues 
still  kept  pushing  ahead  with  the  hope  of  coming 
under  the  favorable  eye  of  the  commission. 

"Each  branch  office  posted  a  blackboard  daily  score- 
card  (Figure  42).  Each  man's  daily  sales  were 
shown.  If  his  sales  for  the  day  were  not  good,  it  was 
more  than  a  personal  disgrace — it  was  an  office  dis- 
grace. Commission  salesmen  are  liable  to  loaf  for 
the  first  few  days  of  the  new  month.  They  have 
passed  the  climax.  They  have  their  commission 
checks.    A  little  rest  sounds  good. 

"But  here  was  a  scoreboard  staring  them  in  the 
face.  A  new  responsibility  came  over  the  men.  They 
were  no  longer  working  for  themselves.  They  were 
working  for  the  office.     The  high-scoring  men  took  no 


DO  SALES  CONTESTS  PAY?  89 

pity  on  those  with  low  scores.     They  got  after  them 
hard.     Work  started  promptly  the  first  day. 

"On  these  scoreboards,  too,  were  posted  the  kidding 
letters  from  the  city  they  were  playing  that  month. 
I  "As  I  look  back,  it  seems  to  me  that  my  contest 
gave  the  salesmen  the  feeling  of  proprietors.  Men  in 
business  push  ahead — for  what?  Profit?  Yes.  But 
isn't  the  joy  of  winning  one  of  the  strong  spurs? 
I  "Now  I  can  look  over  order  sheets  and  thank  my 
stars  for  baseball.  My  sideline,  instead  of  slipping 
out  of  the  salesmen's  minds  in  the  midst  of  that 
summer's  depression,  became  a  strong,  live  issue.  The 
sales  records  show  it.  The  second  month  saw  more 
cities  in  the  more-than-25%-gain  class.  The  third 
month,  15  offices  showed  better  than  a  40%  increase 
over  the  corresponding  month  of  the  year  before. 

"Columbus,  with  a  good  record  the  previous  year, 
showed  for  one  month  a  gain  of  153%.  Detroit  stood 
high  in  percentages  of  increase. 

"I  believe  our  plan  can  be  applied  quite  effectively 
to  a  small  sales  organization  as  a  spirit-rouser,  as  well 
as  to  a  large  one.  WTien  you  get  right  down  to  it,  any 
athletic  contest  represents  hard  work.  The  players  go 
into  it  voluntarily.     Why?     For  a  chance  to  win. 

"My  56  teams  were  working  hard,  but  they  scarcely 
knew  it.  Even  buyers  caught  the  competitive  spirit. 
In  Milwaukee,  for  example,  there  was  a  large  consumer 
of  our  class  of  product.  We  had  worked  on  this  con- 
cern for  four  years  without  success.  One  of  our  sales- 
men called  and  outlined  the  baseball  contest.  The 
manager  showed  a  keen  interest.  To  our  salesman's 
surprise,  he  called  in  his  purchasing  agent  then  and 
there  and  instructed  him  to  buy  from  us  in  the  future. 

"Turning  to  our  man  he  said,  'jMilwaukee  has  got 
to  win  this  contest  in  any  event!'" 

A  similar  appeal  has  been  used  with  good  results  also 
by  a  concern  in  Detroit.     The  plan,  as  used  in  this 


90  BOOSTING  THE  SALES  VOLUME 

organization,  calls  for  a  division,  according  to  sales 
quotas,  of  the  sales  force  into  leagues.  There  are  10 
leagues  which  compete  in  the  vigorous  contests  that 
extend  through  the  summer  and  into  a  post-season 
championship  game  at  the  home  office  during  the 
organization's  annual  sales  convention. 

Each  of  the  10  leagues  includes  agencies  with  similar 
sales  quotas.  Each  agency  ranks  as  a  nine  or  team. 
There  are  10  teams  in  each  of  six  of  the  leagues,  and 
the  remainder  of  the  leagues  have  12  teams  each. 
Each  team  plays  nine  games.  The  games  last  10  days, 
and  the  scores  are  based  on  the  percentages  of  the 
quotas  obtained  during  the  season. 

The  managers  of  the  10  winning  teams  are  taken  to 
the  annual  convention  at  Detroit  at  the  company's 
expense  to  play  a  picked  team  of  star  salesmen  for  the 
real  baseball  championship  of  the  selling  force.  The 
manager  of  the  team  that  makes  the  best  three  months' 
showing  automatically  becomes  manager  of  the  team 
of  managers  taken  to  Detroit  ''on  the  house." 

A  special  series  of  bulletins  keeps  everybody  in- 
formed of  the  contest's  progress.  The  bulletin  is  called 
"The  Scoreboard,"  and  whenever  practicable  it  is 
written  in  the  same  style  as  baseball  reports  in  the 
newspapers.  Cartoons  and  photographs  of  the  con- 
testants frequently  are  featured. 

Next  to  the  interest  in  current  events  and  to  the 
love  of  sport,  manufacturers  and  wholesalers  have 
found  that  the  appeal  which  will  get  best  results  from 
salesmen  is  that  to  his  pride  in  his  organization  and  in 
his  own  achievements.  How  this  appeal  was  used 
successfully  is  well  illustrated  by  a  story  told  by  the 
head  of  a  western  wholesale  concern  and  showing  its 
effect  on  one  salesman  of  the  force. 

This  salesman  had  been  working  along  steadily  for 
several  years,  getting  within  striking  distance  of  his 
quota  each  year  and  earning  enough  to  live  on.    One 


DO  SALES  CONTESTS  PAY?  91 

morning  he  opened  the  envelop  containing  the  weekly 
bulletin  from  the  office  and  saw  in  a  large  headline  in 
red  ink  the  words  "Are  you  going  to  be  there?" 

Under  the  heading  was  an  article  calling  attention 
to  the  fact  that  to  get  his  expenses  paid  to  the  conven- 
tion at  the  factory  it  was  necessary  to  reach  a  certain 
percentage  of  his  quota.  The  article  gave  a  list  of  a 
number  of  salesmen  who  already  had  made  their  per- 
centages and  would  *'be  there." 

Suddenly  this  salesman  realized  that  if  he  was  not 
there  his  absence  would  be  noticed.  It  gave  him  an 
incentive.  He  no  longer  went  about  his  work  in  a 
half-hearted  way,  and  he  no  longer  measured  his  effort 
on  a  standard  which  would  merely  enable  him  to  ''get 
by."    He  wanted  to  be  at  that  convention. 

WHEN  THIS  SALESMAN  CHANGED  HIS  SALES  HABITS  HE  FOUND 
THAT  BL'SINESS  PICKED  UP  ALMOST  AT  ONCE 

Instead  of  getting  up  at  a  time  when  he  thought  his 
first  prospect  would  be  at  the  office  he  made  calls  two 
hours  earlier  than  he  had  ever  thought  a  business  man 
would  be  in  his  office  in  the  morning. 

To  his  surprise  he  found  he  could  make  three  or 
four  calls  and  sell  goods  before  his  usual  time  for  be- 
ginning work.  Other  salesmen  were  not  in  line  to  keep 
him  waiting.  Also  he  shortened  his  noon  hour  and 
worked  later  instead  of  slowing  up  at  three  or  four 
o'clock  as  the  other  salesmen  did.  He  found  appoint- 
ments often  could  be  obtained  easier  at  the  early  and 
late  hours.  He  found  that  he  could  often  get  appoint- 
ments in  the  evening  to  advantage. 

In  place  of  working  three  or  four  hours  a  day  with 
perhaps  one  hour  actually  with  prospects  he  found  he 
could  work  eight  or  ten  hours  with  three,  four  or  some- 
times five  hours  actually  with  prospects. 

Because  he  took  more  interest  in  his  work  and  gave 
more  time  under  the  special  incentive  his  sales  increased 


92  BOOSTING  THE  SALES  VOLUME 

in  proportion  and  he  easily  made  his  quota  and  won 
his  place  at  the  convention  without  trouble. 

This  company  also  has  a  "Pace-makers'  Club"  for 
salesmen  and  every  man  on  the  force  tries  hard  for 
the  honor  of  being  included  in  its  membership.  Effort 
is  further  encouraged  by  a  system  of  bonuses  which 
has  been  worked  out  for  each  man  making  the  club. 

His  first  year  he  receives  a  bonus  of  $50  for  gaining 
membership.  The  second  year  it  is  $75 ;  the  third  year, 
$100;  the  fourth,  $125;  and  the  fifth  consecutive  year, 
$250.  These  bonuses  are  in  addition  to  full  expenses 
covering  a  trip  to  the  convention. 

This  system  not  only  keeps  the  salesman  interested, 
but  it  also  helps  to  keep  him  in  the  organization. 

To  make  the  club  a  salesman  has  to  sell  500  points 
— a  point  varying  from  $40  to  $100  in  sales  according 
to  the  item  sold.  That  is,  the  year's  business  must  be 
from  $20,000  to  $50,000. 

Another  incentive  to  work  for  membership  lies  in 
the  fact  that  the  first  man  to  make  the  club — that  is, 
the  first  to  sell  his  500  points,  automatically  becomes 
president  of  the  club  for  the  year.  The  second  man 
becomes  vice-president,  the  third  secretary,  and  so  on 
until  all  the  offices  and  directors  are  named. 

In  addition  to  this  contest  the  company  has  a 
separate  contest  for  the  district  making  the  highest 
percentage  of  its  quota  for  the  year.  This  causes  the 
men  to  work  together,  for  the  names  of  all  members  of 
the  winning  team  are  engraved  on  the  loving  cup  which 
is  the  prize.  As  a  further  personal  incentive  each  man 
receives  a  bonus  of  10%  on  all  sales  above  the  quota 
established  for  his  particular  territory. 

One  specialty  concern  has  a  hundred-point  club  for 
salesmen  who  make  100%  of  their  quota  for  the  year. 
This  organization  is  too  well  known  to  require  detailed 
description  but  in  its  workings  it  is  much  Hke  the 
pace-makers'  club  just  described.     Those  who  make 


DO  SALES  CONTESTS  PAY?  93 

the  club  are  entertained  at  the  home  office  once  a  year 
for  a  week.    Out  of  500  salesmen  about  150  win. 

This  concern  also  holds  a  four-month  contest  for 
200%,  175%,  150%,  and  125%  of  quotas.  Valuable 
merchandise  prizes  are  given  in  each  class.  Since  many 
of  the  articles  given  as  prizes  are  for  use  in  the  home 
the  company  tells  the  wives  of  the  salesmen  all  about 
them  and  it  has  acted  as  a  great  incentive  to  salesmen 
to  try  for  prizes  which  their  wives  want. 

Another  concern  appealed  to  the  pride  of  the  sales- 
man and  to  his  loyalty  to  the  company  by  a  series  of 
four  monthly  contests,  each  contest  being  named  in 
honor  of  some  official  of  the  company.  The  first 
month  was  the  president's,  the  second  the  secretary's, 
the  third  the  sales  manager's,  and  the  fourth  the  trea- 
surer's. This  naming  of  the  contests  is  similar  to  the 
plan  carried  out  in  the  dealer's  contest  described  near 
the  beginning  of  the  section. 

Prizes  in  this  contest  were  a  series  of  certificates 
signed  by  the  official  in  whose  month  the  contest  was 
held.  The  certificates  bore  a  picture  of  the  official 
and  the  seal  of  the  company.  These  prizes  are  valued 
highly  by  the  salesmen  for  they  realize  that  they  con- 
stitute the  best  sort  of  a  testimonial  to  sales  ability. 

Pictures  and  cartoons  of  each  official  were  run  in 
the  company  house  organ  during  the  month  of  their 
particular  contest,  as  well  as  ginger  articles  by  them. 

The  months  of  the  contest  showed  these  results. 

President's  month:  A  new  company  record  for 
January;  a  new  New  York  office  record;  a  new  sales- 
men's record  for  individual  sales. 

Secretary's  month:  A  new  February  record;  a  new 
record  for  the  London  office. 

Sales  manager's  month:  A  new  high  record  for  the 
company;  many  offices  established  new  records. 

Treasurer's  month:  A  gain  of  31.5%  over  the  pre- 
vious April;  a  new  high  record  for  foreign  business. 


94  BOOSTING  THE  SALES  VOLUME 

This  company  has  found  merchandise  prizes  have 
a  greater  general  appeal  than  cash  prizes.  An  auto- 
mobile contest,  with  a  light  car  as  a  prize  aroused  a 
great  deal  of  interest.  This  contest  ran  during  Sep- 
tember, October,  November  and  December  of  one  year. 
It  was  modeled  after  an  automobile  road  race. 

One  of  the  novel  features  of  the  contest  was  the  map 
which  was  published  in  the  house  organ  each  month 
showing  the  standings  and  the  course.  The  race  began 
at  the  town  of  Fairstart  and  the  course  the  first  month 
was  to  Octoberville.  The  second  month  was  from 
Octoberville  to  Novemberton;  the  third,  from  Novem- 
berton  to  December  City  and  the  fourth  from  De- 
cember City  to  Hot  Finish.  In  November  a  ''Hell 
Fire"  edition  of  the  house  organ  carried  a  bright  red 
cover  with  a  picture  of  the  devil  spearing  a  salesman 
with  his  trident.  Inside,  a  single  sheet  was  of  as- 
bestos with  the  explanation,  ''Our  message  is  so  hot 
that  we  cannot  trust  it  to  ordinary  paper." 

HERE  ARE  SEVERAL  TRIED-AND-TRUE  CONTEST  PLANS  WHICH 
HELP  TO  SECURE  WIDER  DISTRIBUTION 

We  come  now  to  the  second  and  last  of  our  tv/o 
general  classifications  of  contests — contests  to  secure 
a  wider  distribution  of  the  line  or  lines.  First,  let  us 
consider  a  contest  used  by  a  concern  in  the  Middle 
West.  Incidentally,  this  contest  also  appeals  to  the 
salesmen's  pride,  for  one  of  the  prizes  given  is  a  mem- 
bership in  the  company's  "Topnotch"  club. 

This  contest  lasts  throughout  the  entire  year.  Every 
man  in  the  sales  organization  from  the  newest  sales- 
men to  the  district  managers  is  interested,  for  any  of 
them  may  obtain  one  or  more  prizes. 

Three  prizes  are  given — to  the  salesman  in  each  ter- 
ritory, the  sales  manager,  and  the  district  manager 
who  show  the  greatest  increases  in  all-round  sales.  The 
object  is  to  get  the  salesmen  to  push  the  entire  line. 


DO  SALES  CONTESTS  PAY?  95 

The  topnotch  salesman  is  the  one  who  has  the  high- 
est percentage  of  increase  in  all-round  sales  in  each 
territory.  The  topnotch  sales  manager  is  the  one  whose 
territory  makes  the  best  showing,  and  the  topnotch 
district  manager  is  the  one  whose  district  has  the 
highest  percentage  of  increase  in  all-round  sales. 

The  topnotch  district  prize  is  $200.  The  first  prize 
for  each  territory  is  $200  and  the  record-making  sales- 
man's prize  is  $100.  The  topnotch  trade  sales  repre- 
sentative gets  an  additional  prize  of  $200. 

In  addition  to  the  cash  prizes,  cups  are  given  to  the 
territories  in  each  district  making  the  highest  all-around 
increases  in  sales.  The  spirit  of  rivalry  which  exists 
among  the  different  groups  adds  great  interest  to  the 
competition.  All  salesmen  making  their  quotas  also 
receive  stickpins  and  fobs  engraved  with  their  names 
and  the  company  emblem.     These  are  prized  highly. 

Other  prizes  are  given  for  such  achievements  as 
gaining  the  highest  percentage  of  the  estimated  total 
net  sales,  the  highest  percentage  of  estimated  net  trade 
sales,  the  highest  percentage  of  gain  in  total  net  sales 
over  previous  year,  the  largest  gain  in  dollars  and  cents 
for  the  year,  the  lowest  percentage  on  sales  deductions 
and  expense  reports,  and  the  highest  percentage  of  the 
estimated  total  of  new  accounts. 

Announcement  of  the  standing  of  the  various  sales- 
men, districts,  and  territories  in  the  company  house 
organ  serves  to  keep  interest  alive  all  the  time.  Contests 
like  this  are  held  each  year  with  slight  variation  on 
the  prizes  and  terms  of  competition  and  they  have  been 
responsible  in  large  measure  for  the  steady  growth  of 
the  company,  according  to  its  sales  manager. 

Another  concern  organized  for  national  distribution 
also  found  a  sales  contest  an  effective  means  of  obtain- 
ing a  wider  distribution  of  its  entire  line.  This  com- 
pany handles  chiefly  a  varied  line  of  food  products, 
both  in  bulk  and  in  branded  packages.     The  chief 


THE   PEAKS   IN   14   LINES 

Jan. 

Feb. 

Mar. 

Apr. 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

Automobile 
Supplies 

Boots  and 
Shoes 

Brass  Goods 

Builders' 
Supplies 

Clothing 

Drugs 

Dry  Goods 

Farm 
Machinery 

Gas  Fixtures 

Gloves 

Hardware 

Office 
Supplies 

Steam  Heat- 
ing Apparatus 

Wall  Paper 

Figure  43 :  Fourteen  manufacturers'  lines  are  charted  here  to  indicate 
the  months  in  which  demand  is  most  active.  This  analysis  makes  it 
possible  to  anticipate  the  summer  possibilities  and  to  locate  the  lines 
that  must  be  pushed  strongest  in  order  to  divide  sales  more  evenly. 

96 


DO  SALES  CONTESTS  PAY?  97 

problem  is  to  get  equitable  distribution.  The  company 
divides  the  country  into  32  districts  and  each  district 
contains  several  branch  houses. 

In  describing  the  contest  which  was  successful  in 
securing  a  wider  distribution  for  its  entire  line,  the 
sales  manager  said: 

"Probably  our  organization  and  line  is  nowhere  else 
duplicated,  but  our  distribution  problem,  I  believe,  is 
one  that  every  sales  manager  has  faced  in  a  greater 
or  less  degree.  For  that  reason  I  think  the  story  of 
how  we  carried  on  our  contest,  and  evolved  out  of  it 
some  methods  of  permanent  value,  will  prove  helpful 
to  other  sales  managers  quite  generally. 

"This  sales  contest  was  the  immediate  means  of 
improvement.  Several  details  of  the  contest  were 
unique.  In  the  first  place,  it  lasted  80  weeks.  The 
grand  prize  was  awarded  to  the  salesman  who  main- 
tained the  best  record  throughout  the  whole  period, 
and  there  were  four  other  prizes  of  less  value  awarded 
to  the  four  men  ranking  next  in  order. 

"It  would  no  doubt  have  been  impossible,  however, 
to  keep  up  the  interest  of  the  men  for  so  long  a  time  if 
these  had  been  the  only  prizes,"  said  the  sales  manager. 
"So  the  contest  was  subdivided  into  six  'contest 
periods,'  and  other  prizes  were  offered  and  distributed 
at  the  end  of  each  period.  From  a  fund  set  aside  for 
the  purpose  by  the  company,  each  district  super- 
intendent was  allotted  $125  for  each  period.  This  was 
divided  by  him  on  this  plan — $50  went  to  the  sales- 
man who  made  the  best  sales  record,  figured  on  volume, 
for  all  hnes  sold  by  the  company.  The  remaining  $75 
went  to  the  branch  house  in  each  district  which  made 
the  best  percentage  of  sales  increase  over  the  same 
period  for  the  preceding  year.  In  the  winning  branch 
house  the  $75  prize  was  divided  into  two  prizes  of 
$50  and  $25  and  these  were  given  to  the  high  and  next- 
high  salesmen  in  that  branch. 


98  BOOSTING  THE  SALES  VOLUME 

''Now  I  will  explain  how  the  salesmen  were  ranked. 
The  mechanism  of  this  process  may  seem  comphcated 
at  first,  but  we  devised  it  after  giving  full  consideration 
to  all  the  factors  in  our  problem,  and  it  seemed  best 
suited  to  accomplish  the  result  we  wanted:  that  is,  to 
get  salesmen  to  sell  all  of  our  lines.  First,  sales  of  the 
different  men  were  classified  under  the  different  lines 
we  carry,  and  totaled  for  volume  in  each  Hne.  That  is 
we  had  the  total  grape-juice  sales  for  each  salesman, 
his  total  sales  of  soda-fountain  suppHes,  and  so  on. 

HERE  IS  EXPLAINED  THE  WAY  THE  CONTESTANTS  \NTERE 
GRADED— A  FAIR  METHOD  YOU'LL  AGREE 

"Suppose,  for  example,  that  there  were  50  men  in 
one  district,  and  Harry  Johnson  sold  more  grape  juice 
than  anybody  else  in  that  district.  He  would  receive 
1  point  in  the  grape-juice  column.  Suppose  Walter 
Anderson  ranked  next.  He  would  receive  2  points 
under  grape  juice.  Now  suppose  that  in  sales  of  soda- 
fountain  supplies  Harry  Johnson  ranked  thirteenth, 
and  Walter  Anderson  third.  Johnson  gets  13  points 
and  Anderson  3  points.  The  aim  of  the  salesmen  was 
to,  keep  their  total  score  just  as  low  as  possible,  since 
the  lowest  man  in  points  won  the  $50  prize  for  the 
district.  There  were  51  salesmen  in  this  district  and 
if  one  of  the  men  failed  to  make  a  single  sale  in  any 
one  line  he  was  marked  51  points — one  point  lower 
than  the  lowest  possible  rank  if  a  sale  was  made.  In 
another  district  where  there  were  30  salesmen,  the 
salesman  who  made  no  sales  was  marked  31  points. 

"Naturally,  these  no-sale  figures  quickly  sent  the 
salesman's  total  number  of  points  up.  As  a  result,  all 
of  the  men  worked  mighty  hard  to  make  at  least  a 
few  sales  in  every  line.  Some  of  our  salesmen  had  been 
in  the  habit  of  maintaining  that  they  could  not  sell 
certain  lines;  at  least  they  did  not,  and  our  general 
distribution  suffered  grieveously. 


DO  SALES  CONTESTS  PAY?  99 

"Under  the  contest  rule  this  condition  soon  changed. 
The  man  who  thought  his  territory  would  not  buy- 
grape  juice  began  to  search  for  sound  reasons  why 
not;  and  he  generally  found  there  was  at  least  one 
dealer  in  his  territory  who  could  be  induced  to  take 
a  few  cases.  The  standing  of  the  salesmen  was  pub- 
lished weekly;  and  we  believe  that  the  bulletins  which 
were  sent  out  to  the  men  with  the  comparative  figures 
of  results  had  as  much  effect  in  stimulating  them  to 
better  efforts  as  the  actual  offer  of  cash  prizes.  No 
man  likes  to  rank  at  the  foot  of  a  competition  list. 

"Our  plan  of  giving  prizes  in  the  branch  which  made 
the  biggest  percentage  of  increase  over  the  same  period 
of  the  previous  year,  gave  everybody  a  chance.  Even 
the  branch  that  had  comparatively  a  poor  territory 
might  very  easily  hope  to  show  a  better  record  than 
the  previous  year — enough  better,  in  fact,  to  win  the 
$75  prize.  So  the  men  had  every  incentive  to  boost 
all  the  time  for  themselves  and  their  branch  house. 

'Tn  awarding  the  grand  prize,  our  job  was  to  pick 
the  man  who  was  most  valuable  to  the  house.  You 
know  that  John  Evers  and  Eddie  Collins,  the  major- 
league  baseball  players,  once  received  automobiles  as 
prizes  because  they  were  believed  to  be  the  most  valu- 
able men  to  their  teams.  Neither  of  them  headed  the 
list  with  their  batting  averages,  but  they  were  con- 
sidered the  all-around  most  valuable  players.  We  had 
the  same  proposition.  We  wanted  to  pick  the  most 
valuable  all-around  man  on  our  entire  sales  staff,  and 
the  four  men  who  came  next  in  order.  We  decided 
the  three  factors  which  are  enumerated  below  deter- 
mined a  salesman's  value  to  us: 

( 1)  The  total  volume  of  his  sales. 

(2)  The  volume  of  his  specialty  sales. 

(3)  The  effectiveness  of  the  distribution  we  secured 
through  him. 


100  BOOSTING  THE  SALES  VOLUME 

"Total  sales  volume  alone  could  not  determine  a 
man's  worth,  because  different  territories  varied  greatly 
in  sales  possibilities.  A  city  territory,  for  example, 
might  yield  the  salesman  a  prospect  every  three  or  four 
blocks,  and  the  time  between  calls  would  be  very  low; 
while  in  a  country  territory  the  time  consumed  in 
going  from  town  to  town  might  be  a  big  factor  in 
lowering  a  man's  volume  of  sales.  The  volume,  then, 
was  only  one  of  the  factors  by  which  we  judged  a  man, 
so  these  inequalities  were  offset  by  the  other  counts. 

"Again,  we  wanted  to  encourage  specialty  sales. 
The  men  find  it  harder  to  sell  specialties  than  'ton- 
nage' products,  but  we  are  anxious  to  raise  the 
specialty  volume,  because  these  goods  carry  our  name 
and  enable  us  to  establish  our  brands.  So  we  'weighted' 
these  two  lines.  We  gave  a  man,  in  figuring  his  final 
value  to  the  house,  one  point  for  each  $100  worth  of 
'tonnage'  business,  and  a  larger  number  of  points  for 
each  $100  worth  of  specialty  business. 

"We  also  figured  the  third  factor — the  effectiveness 
of  the  salesman's  distribution — on  a  point  basis,  but  we 
worked  it  out  differently.  We  wanted  every  man  to 
cover  his  field  just  as  thoroughly  as  possible.  We 
wanted  him  to  sell  just  as  many  of  the  dealers  in  his 
territory  as  he  could,  and  we  wanted  him  to  sell  each 
dealer  just  as  many  lines  as  possible.  So,  at  the  begin- 
ning of  the  contest,  we  had  each  salesman  list  all  the 
towns  on  his  route.  We  then  employed  a  rating  agency 
to  list  for  us  under  about  eight  classifications— groceries, 
drug  stores,  delicatessen  shops,  and  the  like — all  stores 
in  the  towns  named  by  the  salesmen  as  points  where 
we  could  hope  to  sell  our  products. 

"Next,  each  class  of  store  was  rated  as  a  possible 
purchaser  of  a*  certain  number  of  our  lines.  For 
example,  a  druggist — if  he  purchased  everything  from 
the  salesman's  list  that  he  could  be  expected  to  sell — 
could  use  5  of  our  lines.    A  grocer,  say,  could  use  13. 


DO  SALES  CONTESTS  PAY?  101 

"Now  suppose  in  a  certain  territory  there  were  100 
drug  stores  and  200  grocery  stores.  Obviously,  the 
total  possible  number  of  orders  that  could  be  secured 
from  drug  stores  would  be  500,  while  the  total  possible 
grocery  orders  would  be  2,600.  In  the  same  way  we 
listed  all  possible  orders  from  all  stores  in  each  man's 
territory  and  arrived  at  a  total,  and  this  total  repre- 
sented perfect  distribution  of  our  products. 

"Naturally,  no  man  could  attain  perfection  in  this 
respect,  so  in  the  final  rating  we  allotted  each  salesman 
so  many  points  equitably  'weighted'  against  tonnage 
and  specialty  sales,  for  each  1%  of  the  total  possible 
orders  which  he  secured  in  his  territory. 

"Say,  for  example,  that  we  awarded  a  man  100 
points  for  each  1%  of  the  total  which  he  realized. 
Suppose  the  total  possible  number  of  orders  in  his 
territory  was  25,000,  and  he  took  1,000  orders.  Two 
hundred  and  fifty  orders,  then,  would  add  100  points 
to  his  score  and  1,000  orders  added  400  points. 

"This  method  of  determining  a  salesman's  value  was 
purely  a  matter  of  office  routine,  but  it  shows  how 
carefully  we  weighed  every  factor  in  finding  the  best 
man  on  our  staff  of  road  salesmen. 

RESULTS  ARE  WHAT  COUNT;  AND  HERE  ARE  INDICATED  THE 
RESULTS  OF  THE  80-WEEK  CONTEST 

"So  much  for  the  way  we  conducted  our  80-weeks' 
sales  contest.    What  have  been  the  results? 

"In  the  first  place,  our  sales  force  is  better  organized 
than  it  ever  was  before.  It  is  more  conscious  of  itself 
as  an  organization,  and  each  branch  house — off  by 
itself  and  always  in  danger  of  failing  to  catch  the 
spirit  of  the  house — responds  more  readily  now  to  the 
idea  that  it  is  a  real  factor  in  the  company's  success. 

"The  salesmen,  also,  feel  the  spirit  of  the  game  more 
keenly  than  ever  before.  The  district  superintendents 
started  sending  out  weekly  bulletins  soon  after  the 


102  BOOSTING  THE  SALES  VOLUME 

contest  began,  showing  how  the  different  men  ranked. 
Before  the  contest  this  comparison  was  made  only  at 
irregular  intervals,  and  the  result  was  that  the  men 
worked  without  any  very  keen  realization  of  their 
sales  relation  to  their  fellow  salesmen.  The  contest, 
however,  has  clearly  shown  the  district  superintendents 
the  importance  of  the  comparative  bulletins  in  building 
the  fighting  spirit.    Their  value  is  fully  recognized  now. 

"Finally,  we  have  created  wider,  permanent  markets 
for  our  specialties,  and  we  have  induced  the  salesmen 
to  sell  the  entire  line.  When  the  contest  began  I 
estimated  that  only  58%  of  our  sales  force  was  pushing 
the  full  line.  Since  the  beginning  of  the  contest  this 
percentage  has  been  raised  until  now  75%  of  our  sales- 
men are  selling  the  full  line  each  week  in  the  year. 

''The  company  continues  its  rating  of  salesmen,  even 
though  the  prizes  are  discontinued,  and  these  ratings  are 
published  every  week.  We  have  definite  knowledge, 
therefore,  of  the  value  of  the  men  to  us — an  absolute 
basis  on  which  to  make  salary  adjustments.  The  men 
know  where  they  stand,  and  have  an  incentive  for 
achievement.  Furthermore,  we  have  definite  reason 
to  believe  that  our  sales  volume  has  increased  far  more 
in  the  past  year  than  it  would  without  the  contest." 

Most  concerns  which  do  not  use  salesmen's  contests, 
it  was  found  by  investigation,  employ  comparatively 
few  men  or  their  men  operate  over  wide  territories 
and  normally  do  not  come  into  the  main  office  for 
frequent  visits.  It  is  less  simple,  therefore,  to  organize 
contests  which  afford  equal  opportunity  to  all. 

''I  believe  in  the  principle  of  sales  contests,"  saj's 
the  sales  manager  of  a  progressive  clothing  concern. 
''I  think  they  have  a  helpful  and  stimulating  effect. 
We  do  not  use  them,  however,  chiefly  because  we  do 
not  want  to  emphasize  primarily  the  effort  to  sell. 
Our  whole  theory  of  busiliess  building  has  been  that 
if  we  could  develop  our  retail  customers  to  be  better 


DO  SALES  CONTESTS  PAY?  103 

merchants,  we  would  help  ourselves  more  effectively 
in  the  long  run  than  if  we  bent  our  efforts  at  all  times 
toward  'selling  more  goods.' 

"If  I  had  a  larger  sales  organization  with  each  man 
working  in  a  smaller,  well-defined  territory  where  I 
could  gage  with  some  accuracy  the  volume  of  sales 
each  man  ought  to  attain,  I  would  certainly  use  con- 
tests to  stimulate  the  men  to  greater  efforts.  We  have 
only  about  25  men,  however,  some  of  them  working 
several  states.  Conditions  vary  in  different  sections  of 
the  country — variations  which  usually  cannot  be 
foreseen  and  which  may  seriously  affect  sales  in  those 
sections.  That  makes  it  almost  impossible  to  run  a 
contest  on  a  fair  basis  to  all  our  men." 

This  man's  views  just  about  sum  up  the  attitude  of 
many  sales  executives,  including  those  who  report 
that  they  do  not  use  sales  contests,  although  they  are 
not  opposed  to  them. 


HOW  TO  MAKE  SALES  CONVENTIONS 
MORE  PROFITABLE 

HOW  can  we  make  our  sales  conventions  this 
year  produce  the  most  value  to  us?"  a  man- 
ufacturer of  farm  implements  asked  his  sales 
manager.  "I  know  our  conventions  are  considered 
successful  and  that  they  are  supposed  to  help  the 
sales  force  to  get  more  business,  but  isn't  there  some 
way  we  can  make  this  benefit  more  apparent?" 

The  sales  manager  thought  a  little.  His  reply  was 
another  question:  "Do  you  suppose  we  could  arouse 
dealers'  interest  in  the  convention  enough  to  make  the 
convention  a  strong  talking  point  for  our  salesmen 
during  the  year?"  he  asked  his  chief. 

The  manufacturer  liked  the  idea  and  a  plan  was 
worked  out.  The  big  convention  was  advertised  ex- 
tensively through  the  trade  papers.  The  program  was 
arranged  and  pubUshed.  A  feature  of  the  program 
consisted  of  a  demonstration  of  the  company's  product 
by  each  member  of  the  sales  force. 

The  attention  of  dealers  was  called  to  the  fact  that 
the  salesman  they  did  business  with  would  be  at  the 
meeting  and  would  take  an  active  part.  To  further 
this  idea  the  company  sent  out  a  post-card  to  each 
dealer,  bearing  the  picture  of  his  salesman. 

When  the  first  session  of  the  convention  was  called 
to  order,  every  dealer  on  the  company's  list  knew  all 
about  it.  His  interest  was  aroused,  especially  in  the 
part  his  salesman  was  to  play.     The  company  made 

104 


CONVENTIONS  WHICH  GET  RESULTS       105 

arrangements  with  a  local  newspaper  to  publish  an 
eight-page  extra  edition  devoted  to  news  of  the  con- 
vention. A  copy  of  this  was  sent  to  all  dealers.  Each 
salesman  also  mailed  cards  to  his  dealers  telling  them 
what  a  good  time  he  was  having  and  what  success  he 
had  with  his  part  of  the  program. 

When  the  salesmen  got  back  on  the  road  the  interest 
and  questions  of  the  dealers  made  an  unusually  favor- 
able opportunity  for  the  salesmen  to  explain  the  new 
models.  Sales  showed  a  substantial  increase  the  first 
month  and  the  good  effect  continued  over  the  year. 

Although  here  was  a  sales  convention  which  was 
a  decided  success,  much  difference  of  opinion  exists 
among  sales  managers  as  to  the  value  of  conventions, 
investigation  indicates.  Some  sales  managers  are 
enthusiastic  over  the  benefits  to  be  derived  from 
annual  meetings  of  the  entire  sales  force.  Others  be- 
lieve that  quarterly  or  monthly  meetings  of  the  men 
in  each  district  or  territory  bring  the  best  results; 
while  still  others  do  not  believe  in  them  at  all. 

One  company,  which  had  held  annual  sales  con- 
ventions for  many  years  recently  discontinued  them 
entirely.  It  decided  the  benefits  were  not  commen- 
surate with  the  costs.  The  majority  of  sales  managers 
are  strong  believers  in  the  value  of  conventions,  how- 
ever, although  opinions  differ  as  stated  before. 

In  determining  the  best  method  of  holding  sales 
conventions  to  make  them  most  profitable  to  the 
company,  investigation  indicated  that  wholesalers  and 
manufacturers  must  consider:  First,  how  often  shall 
conventions  be  held  and  shall  they  be  for  all  or  part 
of  the  sales  force?  Second,  how  can  the  convention 
be  made  interesting  enough  to  hold  salesmen's  atten- 
tion?   Let  us  take  these  questions  up  in  turn. 

One  wholesaler  for  many  years  held  annual  con- 
ventions of  his  entire  sales  force  at  New  York  City. 
These  conventions  lasted  three  days.    More  recently, 


108  BOOSTING  THE  SALES  VOLUME 

however,  he  has  changed  his  plan.  Now  all  the  sales 
representatives  west  of  Pittsburgh  meet  in  Chicago  and 
all  eastern  salesmen  meet  in  New  York  City.  The 
conventions  last  one  day  and  are  speeded  up  to  get 
the  most  from  the  time.  The  new  plan  has  been  found 
far  better  from  a  productive  standpoint  and  it  suits 
the  men  better.  Under  the  old  system  many  of  them 
became  bored  with  the  proceedings  and  the  net  result 
was  more  harm  than  good,  it  was  found. 

One  progressive  paint  company  also  is  a  great  be- 
liever in  conventions.  Every  two  years  this  company 
holds  a  big  three-  or-four-day  meeting  which  includes 
its  foreign  representatives  as  well  as  those  in  the 
United  States.  Smaller  conventions  also  are  held  from 
time  to  time  at  the  factory  or  at  some  other  convenient 
point.  District  managers  are  called  together  fre- 
quently to  talk  over  new  products  or  to  decide  on 
some  new  plan  of  distribution.  The  district  managers 
themselves  often  call  meetings  of  the  sales  managers 
and  salesmen  in  their  territories. 

"THESE  MEETINGS  HAVE  DONE  MUCH  TO  UNIFY  OUR 
ORGANIZATION  AND  TO  CREATE  LOYALTY" 

"After  these  meeting — and  especially  the  big  biennial 
gathering — the  men  go  back  to  work  with  enthusiasm, 
armed  with  new  ideas  which  bring  direct  results  in 
increased  sales,"  said  the  general  sales  manager  of  this 
company.  ''These  meetings  have  done  much  to  unify 
our  organization  and  to  create  a  loyalty  which  has  an 
enormous  influence  on  sales" 

''Our  annual  sales  convention  is  chiefly  a  clearing 
house  for  complaints  and  grievances  which  the  sales- 
men may  have  accumulated  during  the  year,"  declares 
another  manufacturer.  "I  tell  the  boys  that  if  they 
go  back  on  the  road  and  then  come  to  me  with  a  com- 
plaint I  will  'beat  them  up.'  I  say  it  in  a  joking  way 
but  they  know  I  mean  business  just  the  same. 


CONVENTIONS  WHICH  GET  RESULTS      107 

"At  our  convention  we  list  the  men  and  their  sales. 
I  make  a  special  effort  during  the  year  to  impress  upon 
the  men  the  importance  of  pushing  the  slow-moving 
lines  and  at  the  convention  the  salesman  who  has  been 
most  successful  in  this  work  gets  a  check  for  $100." 

Another  wholesale  concern  holds  an  annual  three-day 
convention.  It  is  declared  that  it  pays,  because  of  the 
opportunity  it  offers  to  ''sell"  all  the  salesmen  on  the 
advertising  campaign  for  the  coming  year.  This,  the 
company  believes,  could  not  be  done  so  effectively  at 
district  meetings,  and  the  advertising  is  an  important 
factor  in  increasing  sales  and  must  have  the  cooperation 
of  every  salesman  to  be  most  valuable. 

One  manufacturer  formerly  held  annual  conventions 
for  his  sales  force.  The  salesmen  employed  by  this 
company  are  all  highly  trained  and  all  receive  high 
salaries.  Because  of  the  high  caliber  of  these  men  the 
company  felt  it  was  unnecessary  to  bring  them  to- 
gether each  year.    The  conventions  were  discontinued. 

In  their  place  the  sales  manager  and  his  assistant 
make  the  rounds  of  the  territories  several  times  each 
year  and  in  this  way  keep  in  personal  touch  with  the 
men.  Ideas  are  exchanged  and  new  sales  methods  are 
discussed.  The  sales  manager  says  that  this  plan 
helps  him  to  work  out  special  plans  for  each  territory 
which  are  more  effective  than  general  methods  would  be. 

Another  manufacturer  has  discontinued  annual  con- 
ventions in  favor  of  district  conventions,  which  he 
thinks,  cost  less  and  are  more  effective.  These  district 
conventions  are  held  simultaneously.  Two  representa- 
tives of  the  general  office  or  the  factory  are  sent  to  each 
convention  to  instruct  the  salesmen  and  to  manage. 

This  plan  does  away  with  its  big  annual  convention 
which  was  hard  to  handle,  and  which  crippled  the 
factory  for  a  week  or  so.  "If  manufacturers  would 
stop  to  think  that,  on  the  basis  of  a  10%  profit,  they 
would  have  to  increase  sales  $60,000  to  break  even 


108  BOOSTING  THE  SALES  VOLUME 

on  a  convention  costing  $6,000,  they  would  be  more 
likely  to  put  their  money  in  more  productive  adver« 
tising,"  says  this  manufacturer. 

One  company  which  has  a  central  location  for  its 
home  office  and  factory,  divides  the  country  into  sales 
divisions  and  each  summer  it  brings  its  salesmen  to 
the  factory,  one  division  at  a  time,  for  a  week  each. 

The  salesmen  are  housed  in  tents  and  small  cottages 
on  the  company  grounds  and  so  they  get  a  httle  out- 
door life  during  the  meeting.  The  sessions  of  the 
conventions  are  held  in  an  open-air  auditorium. 
Provision  also  is  made  for  some  competitive  outdoor 
sport  during  the  convention. 

Programs  are  arranged  so  that  each  department  has 
one  day  assigned  especially  to  it.  By  this  plan  the 
company  executives  need  give  only  one  daj""  a  week  to 
the  convention  for  the  several  weeks  the  men  from  the 
different  divisions  are  there.  At  the  same  time  each 
group  gets  the  full  benefit  of  advice  and  instruction 
from  each  department  head. 

Another  company  worked  up  from  holding  small 
conventions  to  larger  ones,  until  it  found  the  plan 
which  best  suited  its  organization.  Instead  of  holding 
•a  big  annual  convention  this  company  for  several 
years  held  a  series  of  meetings  in  each  territory. 
Managers  of  branch  houses  attended  these  meetings, 
which  were  presided  over  by  the  superintendent  of  the 
district. 

These  superintendents  or  district  managers,  how- 
ever, it  was  found,  too  often  made  the  meeting  a  place 
to  display  their  authority.  They  often  criticized  sales- 
men who  are  unfortunate  enough  to  be  low  on  the  sales 
Ust  at  the  time  of  the  convention,  and  gave  perhaps 
undue  praise  to  higher  men. 

The  object  of  this  policy,  of  course,  was  to  hold  up 
the  good  men  as  models  for  the  other  to  follow.  In 
most  instances,  however,  the  result  was  to  embitter 


CONVENTIONS  WHICH  GET  RESULTS       109 

the  less  successful  salesmen  against  both  the  managers 
and  the  higher-record  salesmen  of  the  force. 

To  remedy  this  condition  the  company  reorganized 
the  districts  so  that  the  meetings  would  be  larger. 
Men  in  each  district  were  given  an  opportunity  to 
discuss  their  problems  among  themselves.  Higher 
executives  took  charge  of  each  meeting.  Harmony 
was  restored  and  a  real  opportunity  furnished  to  the 
men  to  learn  the  company's  plans  and  poUcies.  It  was 
possible  here  to  go  into  the  details  sometimes  difficult 
for  the  salesmen  to  grasp. 

Another  concern — it  distributes  food  products — 
finds,  however,  that  frequent  branch  conventions  are  a 
great  help  to  the  sales  force.  At  these  meetings,  which 
last  one  day,  instructions  and  information  from  the 
head  office  are  gone  over  and  digested  in  detail. 

This  company  holds  group  conventions  at  least 
twice  a  year,  at  which  members  of  the  home-office  staff 
meet  the  salesmen  and  managers  of  the  nearby 
branches.  Twice  a  year,  also,  all  the  branch  managers 
are  summoned  to  a  convention  at  the  home  office. 

DIFFERENT  LINES  SOMETIMES  REQUIRE  DIFFERENT 
C0N\T:NTI0N  plans— HERE  ARE  IDEAS  FOR  ALL 

Two  meetings  a  year  are  especially  valuable  for 
manufacturers  of  goods  affected  by  the  seasons  or  the 
styles,  it  was  found.  For  example,  one  shoe  manu- 
facturer holds  formal  sales  meetings  twice  a  year.  At 
these  meetings  market  conditions  are  studied,  styles 
are  gone  over  carefully,  and  the  chief  selling  points  of 
each  number  are  discussed.  Certain  shoes  have  strong 
features  and  these  features  are  brought  out. 

Another  shoe  manufacturer  holds  an  annual  con- 
vention for  all  his  salesmen,  and  semiannual  con- 
ventions for  as  many  men  as  can  be  brought  to  the 
home  office  conveniently  at  the  half-year  period.  At 
these  meetings  the  men  exchange  experiences. 


110  BOOSTING  THE  SALES  VOLUME 

An  electrical-goods  house  which  employs  75  men  has 
them  all  in  at  the  home  office  twice  a  year,  in  instal- 
ments of  25  men  each.  This  plan,  the  company  feels, 
is  much  better  than  having  them  all  in  at  once,  as 
more  can  be  accomplished  in  the  smaller  meetings. 

One  dry-goods  house  has  all  its  salesmen  visit  the 
factory  at  least  four  times  a  year.  Those  who  have 
nearby  territories  come  in  every  three  or  four  weeks  to 
get  in  touch  with  the  department  managers  and  to 
talk  over  market  conditions,  and  so  on. 

Th^  plan  is  in  direct  contrast  to  the  pohcy  of  an- 
other dry-goods  house  which  allows  its  salesmen  to 
come  to  headquarters  only  twice  a  year — once  just 
before  the  spring  line  is  ready  and  once  just  before  time 
to  put  the  fall  line  on  the  market.  At  these  times  a 
general  convention  is  held  which  lasts  four  or  five 
days,  and  the  men  receive  their  instructions. 

There  is,  investigation  indicates,  a  tendency  on  the 
part  of  many  manufacturers  and  wholesalers  to  cut 
down  the  sessions  of  conventions,  to  hold  them  more 
often  and  to  hold  district  or  group  meetings  rather 
than  general  meetings  for  the  entii-e  sales  force.  All, 
however,  have  the  common  problem  of  making  their 
conventions  interesting — the  second  of  the  two  prob- 
ems  we  laid  down  near  the  start  of  the  section. 

One  wholesale  concern  begins  to  arouse  interest  in 
its  convention  several  weeks  ahead  of  time  by  sending 
out  letters  asking  the  salesmen  to  make  notes  of  ques- 
tions they  wish  discussed.  This  concern  holds  con- 
ventions in  cities  where  there  are  district  managers  and 
the  district  managers  make  all  arrangements  for  them. 

It  is  the  careful  working  out  of  the  details  of  a 
convention  that  often  determines  whether  it  is  a 
profit  or  loss  to  the  house,  according  to  the  general 
sales  manager  of  one  concern,  who  has  had  long  ex- 
perience in  managing  conventions.  He  believes  that 
little  arrangements  which  make  for  the  comfort  of  the 


CONVENTIONS  WHICH  GET  RESULTS       111 

men,  and  a  well-organized  program — one  which  permits 
of  no  delays  or  useless  discussion — will  keep  interest 
at  a  high  pitch  all  through  the  meetings. 

When  the  salesmen  for  this  company  arrive  at  the 
place  of  meeting  they  find  rooms  waiting  for  them  at 
the  hotel.  When  they  ask  for  their  mail  they  find 
letters  giving  them  information  about  the  program, 
the  time  and  place  of  each  meeting,  and  so  on. 

A  list  of  the  names  and  room  numbers  of  the  other 
salesmen  present  is  provided,  as  well  as  a  list  of  the 
names  of  the  home-ofhce  men.  Emphasis  is  laid  on 
the  fact  that  the  men  are  there  for  business  and  not  for 
pleasure.  The  program  is  arranged  by  the  adver- 
tising department  and  the  sales  department. 

Department  sales  managers  from  the  home  office  are 
provided  with  rooms  where  they  can  meet  the  various 
salesmen.  In  fact,  the  first  day  is  given  over  to  these 
conferences.  The  salesmen  are  invited  to  criticize  the 
product,  equipment,  or  method  of  distribution,  and 
personal  difficulties  also  are  taken  up  and  disposed  of. 

During  the  lunch  hour  the  men  may  do  as  they 
please  and  this  applies  also  to  the  evenings  after  the 
session  closes.  Formerly  the  company  arranged  theater 
parties  or  some  other  amusement,  but  it  found  that 
so  many  of  the  men  had  friends  or  relatives  they  wished 
to  visit  while  in  the  city  that  the  plan  did  not  pay. 
Groups  of  salesmen,  however,  are  invited  to  form 
theater  or  automobile  parties  "on  the  company." 

The  few  set  addresses  of  the  convention  are  short 
and  are  based  largely  on  the  points  brought  out  in  the 
personal  conferences  of  the  preceding  day. 

A  concern  which  makes  a  high-priced  specialty  holds 
conventions  often,  but  they  never  lack  interest,  be- 
cause of  the  varied  methods  used  by  the  speakers  to 
present  their  subjects.  One  of  these  is  to  use  large 
sheets  of  paper  in  illustrating  the  talk  instead  of  a 
blackboard  which  often  cannot  be  seen  at  a  distance. 


112  BOOSTING  THE  SALES  VOLUME 

Colored  chalks  are  used  to  bring  out  the  different  points. 
Stereopticon  machines  have  been  used  with  success 
at  these  conventions,  as  well  as  actual  demonstrations 
of  the  product.  This  company  also  stages  short  play- 
lets which  depict  a  salesman  making  a  demonstration 
to  a  "hard-to-sell"  customer.  The  stage  is  set  to 
represent  the  interior  of  a  retail  store.  Moving  pictures 
also  are  used  successfully  to  demonstrate  the  manu- 
facturing process  on  the  different  lines. 

The  success  of  these  conventions,  however,  arises 
from  the  fact  that  each  demonstration  is  carefully 
planned  and  rehearsed  to  prevent  it  from  developing 
into  a  farce.  At  no  one  session  is  the  same  type  of 
demonstration  used  twice.  For  example,  in  one  meeting 
the  first  speaker  may  illustrate  his  talk  with  charts 
and  crayons,  the  next  use  stereopticon  pictures,  and 
the  third  make  an  actual  demonstration  of  the  product. 

HERE'S  A  CONVENTION  PLAN  DECLARED  TO  PROVIDE  SALESMEN 
WITH  MANY  STRONG  SALES  ARGUMENTS 

One  manufacturer  of  paints  and  oils  arranges  exhibits 
which  show  the  crude  products  and  the  various  states 
they  go  through  in  the  com-se  of  manufacture,  while  a 
manufacturer  of  insecticides  uses  the  stereopticon  views 
to  illustrate  a  talk  on  the  life  and  habits  of  the  insects 
which  the  company's  product  cuts  short.  Demon- 
strations like  these  are  declared  to  provide  salesmen 
with  strong  selling  arguments. 

At  the  annual  convention  held  by  a  wholesale  com- 
pany the  sales  and  advertising  manager  and  one  of  the 
salesmen  presented  a  playlet  representing  a  demon- 
stration to  a  merchant.  It  aroused  so  much  interest 
that  the  salesmen  in  the  audience  passed  up  notes  to  the 
"merchant"  bearing  more  questions  for  him  to  ask 
the  ''salesman."  This  plan  helped  to  clear  up  many 
actual  objections  to  the  line  which  the  salesmen  had 
encountered  while  on  the  road. 


CONVENTIONS  WHICH  GET  RESULTS       115 

One  manufacturer  of  specialties  selling  to  cities, 
schools,  and  the  like,  carried  out  a  somewhat  similar 
demonstration,  but  put  the  entire  convention  in  the 
hands  of  the  salesmen  to  carry  through. 

The  lead  was  played  by  a  star  salesman  who  had 
made  an  enviable  record  selling  to  cities.  Other  sales- 
men and  representatives  of  the  manufacturing  depart- 
ment played  the  parts  of  the  mayor  and  members  of 
the  city  council.  They  made  all  sorts  of  objections  to 
the  company's  product  and  forced  the  salesman  to 
make  the  best  presentation  of  his  life.  Of  course,  the 
men  in  the  audience  got  many  valuable  pointers. 

In  a  similar  way  another  salesman  sold  "high-grade 
fixtures  to  a  thrifty  school  board."  Mistakes  in  the 
presentation  were  criticized  freely  and  good  sales  argu- 
ments were  brought  out  in  great  detail. 

This  convention  was  followed  up  by  the  publication 
of  the  "Convention  Extension  Monthly"  which  each 
month  brought  up  questions  discussed  at  the  con- 
vention, and  urged  the  salesmen  to  write  in  their 
experience  in  using  the  information  learned  there. 

That  this  plan  of  "extending"  the  convention 
throughout  the  year  was  successful  was  shown  not  only 
by  the  fact  that  sales  were  larger,  but  also  by  the  fact 
that  salesmen  concentrated  on  the  goods  which  yielded 
a  bigger  percentage  of  profit.  And  because  the  second 
line  of  defense — the  office  force — also  came  in  for  con- 
structive criticism  at  the  convention,  this  supporting 
line  of  the  sales  army  was  strengthened  as  well. 

One  manufacturer  holds  office  councils  to  clear  up 
office  mistakes  and  outline  new  policies,  and  sales- 
men's meetings  are  handled  in  the  same  way.  Men 
who  have  made  mistakes  are  asked  to  explain,  and  in 
this  way  the  men  get  a  clear  idea  of  what  is  going  on 
and  what  is  expected  of  them.  Often  misunder- 
standings between  the  sales  and  manufacturing  depart- 
ments are  cleared  up  at  these  meetings.    The  chief 


116  BOOSTING  THE  GALES  VOLUME 

accountant  and  the  credit  men  are  always  present,  and 
differences  with,  the  salesmen  are  smoothed  out. 

Attention  to  the  little  mechanical  details,  as  proper 
seating  arrangements,  comfortable  chairs,  and  good 
ventilation,  often  can  turn  an  indifferent  convention 
into  one  full  of  enthusiasm,  it  was  found.  One  manu- 
facturer, for  example,  provided  comfortable  chairs  and 
small  tables  for  each  representative.  These  were 
arranged  so  the  salesmen  from  each  section  sat  to- 
gether. Stationery  was  provided  at  each  table  and 
messenger  boys  collected  and  distributed  mail. 

Another  concern  makes  its  salesmen  feel  at  home 
during  conventions  by  enlisting  the  cooperation  of  the 
home-office  force.  Previous  to  the  convention  a  meet- 
ing is  held  and  the  office  staff  is  impressed  with  the 
fact  that  the  salesmen  are  the  guests  of  the  company 
and  are  to  be  treated  cordially.  Office  boys,  stenog- 
raphers, everyone  in  the  office  is  told  that  every  effort 
is  to  be  made  to  make  each  salesman  feel  he  is  a  part, 
and  a  mighty  important  part  of  the  organization,  and 
this  plan  has  proved  exceedingly  successful  in  develop- 
ing loyalty  in  the  sales  force. 

THERE  ARE  A  NUMBER  OF  TESTED  CONVENTION  PLANS  HERE, 
READY  TO  GO  TO  WORK  FOR  YOU  AT  ONCE 

In  preparing  the  program  for  its  convention  one 
concern  printed  on  each  left-hand  page  a  small  picture 
of  each  speaker  and  a  short  biography.  The  rest  of  the 
page  and  the  entire  right-hand  page  was  left  blank  for 
notes.    This  plan  took  well,  it  was  found. 

A  "route  sheet"  designed  on  the  plan  of  the  work 
route  sheets  often  used  in  factories  to  illustrate  how 
the  line  of  operation  proceeds,  guided  the  activities 
of  the  salesmen  at  one  manufacturer's  convention  in  a 
southern  city.  It  proved  an  effective  method  of  getting 
the  men  around  to  all  the  activities,  without  forgetting 
any  event  or  losing  any  time  in  the  process. 


CONVENTIONS  WHICH  GET  RESULTS       117 

These  route  sheets  were  about  9  by  12  inches  in  size. 
Each  day's  activities  took  up  three  columns.  Along 
the  left  of  each  column  ran  figures  representing  the 
time  of  day  and  opposite  each  hour  appeared  notations 
about  the  activities  that  would  come  in  for  attention 
at  that  time.  Thus,  all  a  salesman  needed  to  do  to 
determine  where  he  should  be  at  a  given  moment  was 
to  turn  to  the  sheet  and  find  out.  It  was  a  conve- 
nient plan,  and  one  greatly  welcomed  by  the  salesmen. 

On  the  other  hand,  one  sales  manager  tells  of  a 
convention  which  had  been  carefully  planned,  every 
precaution  taken  to  insure  the  salesmen's  comfort,  and 
a  good  program  arranged,  but  which  was  made  a 
partial  failure  because  frequent  telephone  calls  and 
other  messages  delayed  the  proceedings. 

Salesmen's  conventions,  however,  are  not  the  only 
sort  from  which  manufacturers  can  derive  benefits,  as 
has  been  demonstrated  by  the  success  of  a  convention 
for  the  wives  of  salesmen  held  by  the  National  Cash 
Register  Company.  This  convention  probably  marks 
a  forward  step  in  the  development  of  sales  organization 
to  a  high  point  of  effectiveness,  and  is  in  line  with  other 
progressive  sales  plans  originated  by  this  company. 

This  convention  lasted  five  days.  The  wife  of  every 
salesman  and  sales  agent  was  brought  to  the  home 
office  at  the  company's  expense.  It  was  the  behef  of 
the  president  of  the  company  that  if  the  wives  of  the 
salesmen  could  be  given  an  intelligent  interest  in  their 
husbands'  business  they  would  be  a  big  factor  in  in- 
creasing sales.  That  he  was  right  was  shown  by  the 
fact  that  the  increased  profit  on  the  first  month  after 
the  convention  more  than  paid  for  its  expense. 

During  the  convention  representatives  of  the  sales 
and  manufacturing  departments  explained  each  feature 
of  the  different  lines,  and  the  women  were  taken 
through  the  factory  by  the  factory  manager  who  ex- 
plained the  different  processes  to  them. 


118  BOOSTING  THE  SALES  VOLUME 

Special  lectures  and  demonstrations  were  arranged 
to  show  the  women  how  they  could  most  effectively  aid 
their  husbands.  Experts  talked  on  questions  of  health 
and  business  cooperation.  The  women  themselves  also 
had  an  active  part  in  the  program.  Some  of  them 
acted  as  salesmen  and  sold  machines  to  others  who 
impersonated  retail  merchants.  The  women  were 
urged  to  study  the  methods  of  the  retailers  with  whom 
they  came  in  contact  and  thus  to  get  ''tips"  for  their 
husbands.    Various  entertainment  features  filled  in. 

Another  concern  has  carried  out  somewhat  the  same 
idea  by  publishing  a  bulletin  for  the  wives  of  its  sales- 
men, and  by  inviting  all  the  women  living  near  its 
plant  town  to  attend  moving-picture  shows  where 
plant  operations  and  demonstrations  are  featured. 

With  progressive  ideas  like  these  developing  every 
day  it  is  plain  that  not  all  the  possibilities  of  sales 
conventions  are  yet  realized.  It  remains  for  the  in- 
dividual manufact\u*er  or  wholesaler  to  work  out  the 
best  form  of  convention  for  his  particular  organization, 
and  then  to  make  his  meeting  as  interesting  as  possible. 
In  this  way  he  encourages  and  instructs  his  salesmen, 
develops  their  loyalty  to  his  house,  and  directly  cuts 
the  cost  of  seUing  by  increasing  sales  effectiveness. 


■p\URING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbohze  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  PubUca- 
tions  are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  knew 
so  well  during  the  war. 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
o/  Cfc«  A.  W.  SHAW  COMPANY 


SECTION   7 

Helping  the  Goods  to  Sell 
Themselves 


HELPING  THE  GOODS  TO  SELL  THEMSELVES 

SALES  on  a  certain  brand  of  soap  packed  three 
cakes  in  a  box  had  been  satisfactory,  but  the 
manufacturer  decided  to  try  an  experiment.  The 
old  package  was  fairly  pleasing  in  design,  but  an 
artist  was  set  to  work  to  design  a  new  one.  When  the 
same  product  was  put  on  the  market  in  the  new  box, 
sales  trebled  in  less  than  three  months.  This  instance 
indicates  the  effective  sales  results  which  sometimes 
can  be  accomplished  by  making  a  change  for  the  better 
in  the  container  the  goods  are  sold  in,  and  it  is  only 
one  of  hundreds  of  like  examples  found  during  the  ex- 
tensive investigation  upon  which  the  series  is  based. 

In  deciding  on  a  package  which  will  stand  out  from 
the  mass,  the  most  important  features  to  consider,  are, 
investigation  indicates,  first,  the  shape  and  size  of  the 
package;  second,  the  label  with  the  trade-mark  or  name 
to  go  on  it;  and,  third,  how  these  features  can  be  used 
effectively  in  demonstrations  and  exhibits. 

What  are  the  advantages  of  having  an  attractive 
package?  Here  are  a  few,  pointed  out  by  a  manu- 
facturer who  has  made  a  close  study  of  the  subject  and 
who  attributes  much  of  his  success  to  the  fact  that  his 
product's  appearance  always  has  appealed  well. 

He  says :  "I  beheve  that  a  properly  designed  pack- 
age is  one  which  suggests  the  particular  merit  of  the 
product,  such  as  quality  or  durabihty.  In  other  words, 
the  package  should  tell  the  manufacturer's  story  of  a 
good  product  to  all  who  see  it. 

158 

Copyright.  1921,  by 

A.  W.  SHAW  COMPANY 

as  a  part  of  tie  Sliaw  St'lling  .Series 


"DRESSING"  THE  PRODUCT  EFFECTIVELY  159 

"It  always  is  necessary  to  have  a  package  attractive. 
That  is,  it  must  be  one  which  will  catch  the  eye.  Then 
the  package  will  claim  an  upstage  position  on  the 
retailers'  shelves  and  will  make  a  better  display. 

"Many  of  our  products  which  formerly  we  sold  in 
bulk  we  now  put  up  in  packages  because  in  this  form 
the  dealers  can  display  them  without  loss  or  damage. 
We  try  to  design  our  packages  so  that  they  will  be 
identified  and  remembered  easily  by  consumers,  and 
so  they  will  create  a  desire  in  their  minds  for  our  goods. 

"We  also  have  found  that  by  packing  our  goods 
in  substantial  containers  we  can  better  control  the 
"condition  in  which  they  reach  the  market.  Let  us 
consider  a  food  product  as  an  example. 

"The  package  should  be  of  a  size  and  shape  that 
will  pack  w^ell  in  cases  without  loss  of  space  and  with- 
out breaking.  I  have  found  that  too  large  a  package 
suggests  cheapness,  and  too  small  a  package  gives  the 
idea  of  expensiveness  which  loses  sales. 

"Then,  too,  in  looking  over  the  dealers'  shelves  the 
customer  often  gets  a  bewildering  impression  of  goods, 
which  is  confusing  and  does  not  identify  any  particular 
brand.  I  have  found  that  the  package  with  the  most 
successful  appeal  is  the  one  which  emphasizes  the 
brand  name  more  strongly  than  the  picture  of  the  goods. 

"I  have  also  found  that  the  color  of  the  label  in- 
fluences the  appeal  which  the  package  has  to  the 
customer.  A  bright  red,  for  example,  attracts  attention 
quickly  and  gives  a  sense  of  warmth.  It  also  can  be 
used  effectively  on  large  packages  because  it  tends  to 
make  the  package  look  smaller.  A  purple  or  violet 
color  gives  the  impression  of  expensiveness  and  rich- 
ness, and  a  green  gives  an  appearance  of  freshness  and 
coolness  which  is  suitable  for  many  products.  Blue 
gives  a  suggestion  of  coldness  and  tends  to  make  the 
package  look  larger,  while  brown  apparently  tends  well 
to  a  suggestion  of  good  things  to  eat." 


160        MARKETING  PLANS  AND  POLICIES 

An  instance  of  the  pulling  power  of  a  distinctive 
package  is  illustrated  by  the  experience  of  a  manu- 
facturer of  cigarets.  This  manufacturer  was  about  to 
put  a  new  brand  on  the  market  and,  of  course,  wanted 
it  to  attract  immediate  attention.  He  studied  the 
packages  of  competitors  and  noticed  that  most  of  them 
tried  for  an  oriental  or  southern  effect. 

He  decided  to  make  his  package  different.  The  box 
he  designed  was  pure  white,  with  the  manufacturer's 
name  on  it  in  gilt  letters,  and  a  narrow  gilt  band 
around  the  edge  of  the  box.  It  was  a  distinctive  con- 
tainer and  went  well  with  the  buyers. 

IT  COST  NO  MORE,  IT  MADE  SALES,  AND  IT  WAS  HONEST— 
AN  EFFECTIVE  PLAN,  YOU'LL  AGREE 

A  similar  experience  is  that  of  a  hat  manufacturer. 
He  decided  that  it  would  cost  no  more  to  use  a  box 
that  was  an  effective  sales  argument  and  fairly  repre- 
sented the  goods  inside  to  the  prospect. 

The  design  decided  upon  had  a  background  showing 
the  sky  line  of  New  York — a  suggestion  of  the  city  the 
hats  came  from.  In  the  foreground  were  four  groups 
of  human/  figures,  each  group  representing  a  different 
season,  and  carrying  the  idea  that  the  company  made 
hats  for  all  seasons  and  climates. 

These  boxes  were  so  attractive  that  dealers  were 
proud  to  display  them  on  their  counter.  For  the  same 
reason  customers  were  more  anxious  to  examine  the 
product,  for  the?  box  carried  a  definite  suggestion  of 
quality.  The  original  cost  of  the  drawing  was  about 
$1,500,  but  as  a  large  number  of  boxes  were  made,  the 
uniU  box  cost  was  small. 

Manufacturers  often  have  found  it  profitable  to  put 
up  their  product  in  special  boxes  for  some  of  their  big 
dealers.  For  example,  one  New  York  dealer  has  an 
especially  rich  and  attractive  store  front  in  a  fashion- 
able shopping  district.    The  manufacturer  of  one  line 


"DRESSING"  THE  PRODUCT  EFFECTIVELY  161 

of  hose  carried  by  this  dealer  devised  a  special  label 
showing  the  store  front.  The  design  itself  caught  the 
eye  and  the  box  created  the  impression  that  the  dealer 
as  well  as  the  manufacturer  was  standing  back  of  the 
goods,  which,  indeed,  he  was. 

At  first  thought  it  would  seem  that  the  sale  of  so 
bulky  an  article  as  a  mattress  could  hardly  be  much 
influenced  by  a  container,  yet  one  concern  provided  an 
attractive  shipping  cover  for  its  mattresses  and  thereby 
attracted  much  attention  to  its  goods. 

In  addition  to  the  color  and  attraction  of  packages 
for  various  products,  there  are  the  elements  of  shape, 
size,  and  convenience  of  handling  to  be  considered. 
One  illustration  of  the  importance  of  this  feature  is 
told  by  a  manufacturer  of  food  products  which  have  a 
large  distribution  in  the  Southwest. 

This  company  put  up  a  brand  of  jam  in  two-pound 
glass  containers.  This  size  \^"as  for  several  years  an 
excellent  seller  in  certain  mining  districts  in  the  South- 
west.    Suddenly,  however,  sales  fell  off  alarmingly. 

Investigation  revealed  that  many  of  the  mines  in 
this  region  had  been  shut  down  and  the  buying  power 
of  the  population  had  been  so  cut  down  that  they 
could  not  afford  to  buy  the  large  package.  The  com- 
pany immediately  put  up  the  product  in  one-pound 
containers  and  sent  them  into  the  district.  Sales 
jumped  50%  within  three  months. 

"I  beheve  if  manufacturers  would  study  more  closely 
the  relation  of  the  size  of  the  package  to  the  conditions 
existing  in  the  selling  field,  their  sales  would  be  in- 
creased," said  the  head  of  this  concern. 

By  changing  the  size  of  the  package  in  which  it 
marketed  its  marshmallows  to  a  pound  capacity,  one 
candy  company  trebled  its  sales  the  first  year  and 
doubled  this  record  in  the  second  year.  Previous  to 
the  adoption  of  the  new  package  the  great  difficulty 
in  selling  this  product  had  been  that  it  would  not  keep 


162         MARKETING  PLANS  AND  POLICIES 

fresh.  It  had  been  the  company's  policy  to  pack  the 
goods  only  in  tins  containing  five  and  ten  pounds. 

The  new  packages  had  telescope  tops,  were  air-tight, 
and  the  goods  kept  almost  indefinitely.  Another  factor 
which  helped  the  sales  of  the  new  product  was  a  little 
booklet  of  recipes  for  its  use,  packed  in  each  tin. 

A  house  which  handles  olive  oil  as  one  of  its  lines 
found  it  paid  to  give  this  product  a  distinctive  con- 
tainer. It  finally  devised  a  ''pinched"  bottle  (one 
with  concave  sides)  which  had  a  distinctive  appearance. 
As  an  additional  feature  it  put  a  curved  neck  on  the 
bottle  so  the  opening  was  on  the  side. 

These  changes  accomplished  two  purposes:  first,  it 
makes  the  product  stand  out  on  the  dealers'  shelves; 
and,  second,  the  curved  neck  made  it  more  convenient 
to  pour  from  the  bottle.  It  was  a  bottle  which  the 
buyer  could  put  on  his  table  for  immediate  use. ; 

For  the  manufacturer  or  wholesaler  who  puts  out  a 
line  of  different  products  in  cans  or  other  containers, 
the  question  of  labels  is  one  requiring  careful  super- 
vision. It  is  not  always  enough  that  the  designs  be 
attractive  and  have  selling  power,  and  that  they  be 
dehvered  at  the  branches  before  the  product  begins  to 
come  through.  There  also  is  the  necessity  that  for 
each  type  of  label  there  shall  be  an  absolute  standard 
of  size,  color  of  stock,  and  the  quality  and  color  of  ink 
used,  and  that  each  successive  batch  of  labels  ordered 
shall  conform  rigidly  to  these  standards.  If  even  a 
slight  variation  be  allowed  it  was  found  that  the  way 
is  opened  to  objection  from  both  dealers  and  consumers, 
to  whom  these  changes  may  suggest  product  variation. 

To  meet  these  requirements  one  paint-and-varnish 
company — it  manufactures  over  600  different  products 
— has  installed  an  effective  system  for  handling  the 
volume  of  detail  connected  with  the  designing  and 
printing  of  labels  for  its  diversified  output.  The  super- 
vision of  this  branch  of  the  business  is  vested  in  a 


Label  Classification 


Label 
Letter 

A 
A  A 

D 

Bs 

BB 
BBS 

C 


Siie  of  Stock      Can  Number 


61x11 
6J  x2t 
81  x\l 
8}  X  1} 
51  X  i; 

51  X  IJ 
91  X  U 


I  Pint 
I  Pint 

IS 

16 

15  (face) 

16  (face) 
27  28 


Label 
Letter 

X  1 

X  1 

X3 

X  4 

X  5 

X6 

X  7 


Size  of  Stock     Can  Number 


M  x4} 
l}xSJ 

21  x7j 
5  x3l 
4x4 
5  x21 
31  x31 


1  Gallon  (side) 

J  Gallon  (side) 

I  Gallon  (side) 

I  Pt   (back) 

Top 
!  Pt.  (back) 
Top 


In  ordering,  the  number  indicates  Label  Classification, 
the  letter  indicates  size 

Lab.                      DESCRIPTION  STOCK  INK 
No. 

1  Agricultural  Implement  Paint Yellow  12  and  Black 

2  Spl.  B.  U.  Astoria  Hdw.  Co Canary  12  and  Black 

3  Buggy    Paint    White  9,  12  &  Black 

4  Aluminum  Paint White  10,  12  &  Black 

5  Bronzing   Liquid   White  Green  and  Gold 

6  Commonwealth  Bam  Red   White  4,  12  fls  Black 

7  Lustroline  Gold  Enamel,  Carton White  10,  Gold  and  Black. 

8  High  Polish  Fluid  Wax White 

9  Special    Marine White  6,  12  fit  Black 

10  Lustroline,  Enameloid White  10,  I2&Black 

11  Creosote  Paint ^....  SWP  12  and  Black 

12  Copper  Faint White  7  and  Black 

13  Distemper   White  9,  12  &  Black 

14  Dura  Verde,  H.  Bosch  Co White  6  and  Black 

15  Distemper  Graining  Color ....•  Blue  Granite-  Black 

16  Drier,  English  Patent •  White  Black 

17  Decorative  Enamel White  Black 

18  Enamel  Leather  Dressing ^.,  White  12.  9  and  Black 

19  SW  Co.  Liq.  Body  Filler Oak  Tint  Black 

20  First  Quality , 1st  Quality  Black 

21  Family  Paint White  12  and  Black 

22  Floor   Wipe. White  9,  8  and  Black 

23  Lustroline,  Varnish  Stain White  7.12andBlack 

24  Spanish  Bridge  Paint Terra  Cotta  Black' 

25  Famous  Floor  Paint,  The  John  Kolbe  Co.  SWP  Black 

26  Nonparifl  Floor  Paint,  Walker  &  Gibson  SWP  Black 

27  Graining   Color ....*.. White  Special  Color 

^r,  ^            ^        L   ^  ..,L-  and  Black 

28  Green,   French  Crown...,. White  Gold,  7  &  Black 

29  Gold   Size 1st  Quality  Black 

30  Oxido  de  Hierro White  7.  12  &  Black 

31 • 

32  Green,  Bronze Terra  Cotta  Black 

33  Brighten  Up  Stain,  Golden  Oak „  White  S,  12  &  Black 


Figures  48  and  49:  A  paint  and  varnish  manufacturing  company  lists 
its  various  labels  by  means  of  an  alphabetical  key.  Each  product  is 
given  a  number,  which  appears  in  the  "Label  Classification  Book." 
Any  changes  to  the  labels  must  be  approved  by  a  special  label  committee. 

163 


164        MARKETING  PLANS  AND  POLICIES 

conunittee  composed  of  three  department  heads — one 
from  the  factory,  one  from  the  advertising  and  sales 
department,  and  one  from  the  printing  department. 
All  prospective  changes  in  design,  additions  of  new 
designs,  and  other  questions  concerning  labels  are 
taken  up  and  passed  upon  by  this  committee. 

The  great  number  of  labels  necessary  for  a  product 
comprising  so  many  different  brands,  sizes  of  con; 
tainers,  and  so  on,  calls  for  a  very  complete  system  of 
classification.  A  reference  book  has  been  compiled, 
therefore,  in  which  are  listed  all  the  products  manu- 
factured by  the  company  and  the  standard  label  which 
has  been  adopted  for  each  brand.  This  is  called  the 
''label-classification  book." 

THERE  IS  LITTLE  CHANCE  OF  CONFUSION  OR  COSTLY  ERROR 
WHEN  THIS  TESTED  LABEL  PLAN  IS  USED 

On  the  first  page  (Figure  48)  the  different  sizes  of 
labels  used  are  listed,  and  each  size  is  identified  by  an 
alphabetical  key.  This  simplifies  reference  to  any 
particular  size,  and  eliminates  much  of  the  possibility 
of  error  in  copying  label  dimensions.  Next  comes  the 
numerical  classifications.  Each  product  is  given  a 
number  (Figure  49)  and  this  number,  in  connection 
with  the  alphabetical  key  which  designates  the  size 
of  the  label,  is  used  in  all  label  specifications.  Inks  also 
have  been  classified  and  numbered,  and  samples  of 
each  color  are  printed  in  the  classification  book.  The 
color  of  stock  used  is  shown,  as  well. 

These  classifications  have  simplified  the  work  of 
identifying  the  many  different  styles  of  labels  in  con- 
stant use.  For  instance,  if  a  supply  of  labels  is  needed 
for  J^-pint  cans  of  special  marine  paint,  it  is  only 
necessary  to  enter  on  the  requisition  5,000,  or  whatever 
the  quantity  may  be,  of  number  9  AA,  we  will  say. 
Reference  to  the  classification  book  in  the  printing 
department  shows  that  the  labels  are  to  be  2yi  inches 


LABEL  ORDER   RECORD 


Order  No        Label  No.        Products         ^"oeo't!'"'^         ^°Dep'."       To  Factory 


URGENT   LABEL 
ORDER 


To  Printing  Office:      Date 

Please  fill  the  following  order  immediately  -  th 
an  order  holding  for  these  labels. 

Ordered  by Approved  by 


Letters  underscored  to  be  printed  in  ink 


Amount 
Wanted 


Description 


Size     W'gt 
Label    Packa 


LABEL  CLASSIFICATION 

Additions  and  Alterations 


Date. 


Additions 


Description 


Stock 


Ink 


Label  No. 


Alterations 


Labels  are  to  be  printed  to  read  same  as  abovedescriplion 
Rodte:  Foreman  Composing  Room 
Foreman  Press  Room 
Foreman  Finishing  Room 
Supt.  Printing  and  Sampling  Oept. 

Gen'l  Acctg.  Cost  Dept.    Signeti 


Figures  50,  51,  and  52:  Orders  for  labels  are  made  out  on  a  label 
requisition  in  triplicate.  The  label-order  record  is  a  record  of  the  various 
orders  placed,  and  is  kept  by  the  department  issuing  the  requisition. 
Requirements  usually  are  estimated  from  six  months  to  a  year  ahead. 

165 


166         MARKETING  PLANS  AND  POLICIES 

by  6^  inches,  printed  on  white  stock  in  Numbers  6 
and  12  inks,  with  the  special  marine  paint  design.  The 
color  index  shows  what  inks  the  numbers  identify. 

The  colors  should  be  limited  to  ten,  if  possible,  this 
company  holds,  as  there  is  decided  economy  in  print- 
ing several  labels  on  one  sheet  in  the  same  press  run. 
Colored  paper  stocks  often  give  very  poor  results 
because  of  variation  in  color.  The  best  color  results, 
therefore,  are  obtained  by  using  tint  plates  and  printing 
on  white  stock,  this  company  beheves. 

When  new  labels  are  ordered  or  old  ones  changed, 
the  department  making  the  order  attaches  a  label- 
classification  slip  (Figure  50)  which  informs  the 
printing  department  of  the  colors,  size,  and  weight  of 
the  proposed  label,  or  changes.  The  printing  depart- 
ment keeps  a  duplicate  classification  book,  as  men- 
tioned above,  and  each  time  a  slip  is  received  the 
information  it  contains  is  entered.  The  slip  then  is 
passed  to  the  interested  departments  and  after  all 
have  made  the  necessary  notations  it  is  returned  to  the 
ordering  department  for  permanent  filing. 

Most  orders  for  labels  originate  from  the  manu- 
facturing department.  Orders  are  made  out  on  a 
label  requisition  (Figure  51)  which  is  in  triplicate 
form.  One  copy  is  kept  by  the  clerk  making  out  the 
order;  the  original  and  one  copy  are  sent  first  to  the 
sales,  then  back  to  the  department  with  whom  the 
requisition  originated,  and  finally  to  the  printing  de- 
partment. All  departments  stamp  both  the  order  and 
label  as  it  goes  through  with  the  time  and  date.  A 
record  of  the  order  is  kept  by  the  department  requisi- 
tioning the  labels  on  a  label  record  (Figure  52). 

"Label  requirements  are  best  estimated  six  months 
or  a  year  ahead,  basing  the  quantities  on  the  previous 
season's  output,"  says  the  sales  manager  of  this  com- 
pany. "This  plan  invariably  saves  many  small  press 
runs  that  are  exceedingly  expensive.     On  the  other 


"DRESSING"  THE  PRODUCT  EFFECTIVELY  167 

hand,  of  course,  it  is  not  advisable  to  print  up  large 
stocks  of  labels  that  may  be  subject  to  frequent  change. 

"To  prevent  slip-ups  in  the  system  a  set  of  rules  is 
necessary.  A  copy  of  them  is  kept  by  each  department 
interested.  The  man  in  charge  sees  that  the  rules  are 
observed  at  all  times  and  under  all  conditions." 

While  the  methods  and  system  just  outlined  are  used 
by  a  large  company,  and  perhaps  seem  compUcated, 
it  should  be  remembered  that  the  fundamentals  in- 
volved apply  whether  the  concern  is  large  or  small. 
The  man  in  the  smaller  business  readily  can  sift  out 
from  it  just  what  he  can  use  to  advantage. 

Another  important  feature  which  may  add  or  de- 
tract from  a  package  is  the  product's  trade  name. 
Often  this  may  be  made  a  strong  selHng  feature. 

Space  in  these  sections  does  not  permit  of  a  lengthy 
discussion  of  the  many  legal  problems  involved  in 
choosing  a  trade  name,  but  it  is  important  to  remember 
that  there  are  many  registered  trade-mark  names,  so  in 
choosing  a  new  name  care  should  be  taken  not  to 
choose  one  which  will  so  closely  resemble  a  name 
already  in  use  that  its  use  will  cause  Utigation.  It 
also  is  well  to  remember  that  names  which  merely 
describe  the  product  or  tell  how  it  can  be  used  are  not, 
as  a  rule,  patentable.  So-called  coined  names,  how- 
ever, usually  can  be  so  protected. 

A  thorough  treatment  of  trade  names  and  trade- 
marks, together  with  laws  governing  their  usage  and 
legal  pitfalls  to  avoid  in  selecting  them,  as  well  as  ways 
to  prevent  infringement,  is  given  in  "Good  Will, 
Trade-Marks,  and  Unfair  Trading,"  a  separate  volume 
published  by  the  A.  W.  Shaw  Company. 

"In  selecting  a  name  for  a  new  product  it  is  well  to 
start  with  one  of  the  more  forceful  and  harsher  sounding 
consonants,  such  as  K,  or  B,  or  T,"  says  the  sales 
manager  of  one  company,  "and  use  several  consonants 
that  stand  out  and  command  attention.    With  them 


168         MARKETING  PLANS  AND  POLICIES 

as  a  basis  it  usually  is  comparatively  easy  to  fill  in 
vowels  to  make  a  strong  name.  A  striking  example 
of  the  results  of  this  method  is  shown  in  "kodak." 

That  a  name  is  an  important  factor  in  selling  a 
product  is  shown  by  the  experience  of  a  concern  which 
manufactures  strings  of  beads  as  one  of  its  products. 
These  beads  first  were  sold  at  50  cents  a  string. 

The  beads  would  not  sell  at  the  start  off.  Then  the 
sales  manager  conceived  the  idea  of  calling  them 
"princess  'pearls.'  "  Coincident  with  the  naming  the 
price  was  raised  to  75  cents.  In  spite  of  this  increase 
in  price  the  sales  were  nearly  doubled  in  six  months. 

HERE'S  SOME  VALUABLE  INFORMATION  ON  TRADE  NAMES 
WHICH  IT  WILL  PAY  EVERY  BUSINESS  MAN  TO  KNOW 

The  place  of  trade  names  in  building  up  good  will 
for  a  product  is  well  known.  It  is  only  necessary  to 
mention  "Sunny  Jim"  or  to  call  to  mind  the  picture 
of  the  little  black  twins  with  their  shining  pan  or  the 
Dutch  girl  with  the  stick,  to  have  the  name  of  the 
product  spring  to  mind  instantly.  These  examples 
show  the  power  of  the  consistent  advertising  of  a  trade- 
mark and  its  consistent  use  on  containers. 

For  example,  a  tobacco  company  had  for  years 
marketed  one  of  its  brands  in  a  rather  shabby-looking 
container  on  the  label  of  which  was  a  crude  picture 
reproduced  from  a  wood  cut.  The  company  decided 
to  make  the  container  more  attractive  and  up-to-date. 
A  new  container  was  adopted  and  widely  advertised, 
but  in  spite  of  it,  sales  fell  off.  Men  were  accustomed 
to  the  old  package  and  would  not  buy  the  fancy 
package.    The  old  container  was  resumed. 

You  all  know  the  two  bewhiskered  gentlemen  on  the 
cough-drop  package.  This  trade-mark  is  old-fashioned 
and  homely,  yet  people  for  three  generations  have 
come  to  know  it,  and  probably  it  would  be  dangerous 
to  profits  to  change  it  in  any  way. 


"DRESSING"  THE  PRODUCT  EFFECTIVELY  169 

Even  with  supplies  of  raw  material  cut  off  and  pro- 
duction curtailed,  the  importance  of  keeping  the  trade- 
mark before  the  pubHc  has  been  recognized  by  many 
manufacturers.  The  manufacturer  of  a  brand  of 
hosiery,  for  example,  felt  that  a  time  of  scarcity  of 
goods  and  one  when  many  manufacturers  were  cutting 
down  on  quaUty,  was  an  excellent  time  to  inform  the 
public  of  the  fact  that  his  trade-mark  stood  for  quality. 

This  also  was  the  view  taken  by  the  manufacturer 
of  a  brand  of  underwear  in  the  same  city,  and  the  two 
concerns  cooperated  in  placing  their  trade-marks  be- 
fore the  public  in  large  space.  Similar  plans  have  been 
carried  out  with  good  results  by  manufacturers  of 
drugs,  hardware,  clothing,  steel  products,  gas  engines, 
and  other  widely  dissimilar  lines. 

A  manufacturer  of  food  products  who  has  for  years 
been  advertising  his  trade-mark  in  a  general  way,  de- 
cided to  launch  a  campaign  to  make  his  brands  really 
mean  something  to  his  consumers.  This  was  done  by 
featuring  the  trade-mark  in  advertising  which  called 
attention  to  tests  showing  the  comparative  standing 
of  this  company's  products  with  competitors. 

In  addition  to  national  advertising  there  is  another 
method  manufacturers  have  found  successful  in  im- 
pressing the  name  or  trade-mark  of  its  products  on 
the  public  and  in  calhng  attention  to  the  qualities 
these  marks  stand  for.  This  is  by  demonstration  at 
conventions  or  fairs  and  in  retail  stores. 

One  manufacturer  of  cement  products,  for  example, 
decided  that  one  of  the  best  ways  to  profit  by  a  series 
of  exhibits  of  building  materials  would  be  to  impress 
the  pubhc  with  the  trade  names  of  his  products. 

An  exhibit  was  arranged  which  included  a  model 
of  a  storehouse  and  wharf.  In  front  of  the  storehouse 
was  a  miniature  freight  car  and  beside  the  wharf  was 
a  ship.  All  were  made  of  cement.  Ingenious  endless 
pulley  chains  gave  the  appearance  of  packages  of  goods 


170        MARKETING  PLANS  AND  POLICIES 

constantly  being  loaded  into  the  car  and  the  boat,  and 
miniature  trains  ran  on  tracks  around  the  entire  exhibit. 
Each  one  of  the  packages  bore  the  product's  trade 
name.  A  sign  over  the  warehouse  also  carried  the 
name.    The  exhibit  attracted  wide  attention. 

A  manufacturer  of  structural  steel  accomplished  a 
similar  purpose  by  an  exhibit  of  miniature  bridges, 
office  buildings  and  so  on,  each  piece  of  steel  used  in 
the  construction  bearing  the  trade-mark  and  name. 

One  manufacturer  of  drug  specialties  made  a  big 
hit  for  one  brand  of  soap  which  he  was  just  putting 
on  the  market  by  having  a  song  written  which  bore 
the  same  name  as  the  soap.  At  the  annual  drug  and 
chemical  shows  in  several  cities  this  song  was  sung. 
At  its  end  samples  of  the  soap  were  tossed  into  the 
crowd.  The  song  had  a  catchj'-  tune  and  as  it  was 
sung  every  half  hour  or  hour,  everj^one  at  the  shows 
soon  caught  the  melody.  In  this  way  the  name  of  the 
soap  was  impressed  definitely  on  the  minds  of  the 
thousands  of  buyers  attending  the  show  each  day. 

A  food-products  manufacturer  decided  to  open  a 
campaign  to  popularize  a  new  brand  of  coffee  by  demon- 
strations in  several  of  the  leading  grocery  stores  in 
large  cities.  An  attractive  booth  was  arranged  in  each 
store  and  women  skilled  in  demonstration  offered  small 
cups  of  the  coffee  to  customers. 

Cooperation  with  the  manufacturer  of  a  coffee  per- 
colator and  a  manufacturer  of  fancy  crackers  made  the 
demonstration  complete.  Everywhere  about  the 
booths  the  name  of  the  brand  of  coffee  and  its  dis- 
tinctive package  was  in  evidence.  During  the  demon- 
stration period  many  thousand  dollars'  worth  of  the 
coffee  was  sold,  and  a  steady  demand  for  it  was  started. 

One  manufacturer  of  high-class  traveling  luggage 
had  trouble  in  getting  dealers  to  carry  his  line  as  the 
investment  required  was  large.  He  decided  to  open 
stores  of  his  own  in  the  hotel  districts  of  several  cities. 


"DRESSING"  THE  PRODUCT  EFFECTIVELY  171 

These  stores  were  opened  purely  for  their  adver- 
tising value — to  inform  travelers  of  the  fact  that  good 
luggage  meant  the  sort  that  bore  his  trade-mark.  The 
cost  was  high  but  the  plan  has  proved  successful  in 
making  his  goods  demanded  by  name  at  other  stores. 
With  numerous  calls  for  them  dealers  felt  obHged  to 
carry  a  stock  of  his  products. 

One  pottery  manufacturer  sold  more  than  $7,000 
worth  of  goods  to  the  department  stores  of  one  city 
in  one  week  through  a  "life  exhibit"  which  illustrated 
the  progress  of  their  manufacture,  from  a  lump  of 
clay  to  the  final  stamping  on  of  the  trade  name  on 
the  bottom  of  the  plates,  pitchers,  and  other  articles. 

There  are,  of  course,  many  variations  of  the  demon- 
stration idea  and  there  is  practically  no  product  large 
or  small,  which  cannot  be  advertised  to  some  extent 
by  this  method.  Many  of  the  ideas  described  in  this 
section  for  selecting  packages,  trade  names  and  marks, 
and  calling  them  to  the  attention  of  buyers  can  easily 
be  adopted  by  manufacturers  in  lines  other  than  those 
which  happen  to  supply  the  incidents  used.  A  dis- 
tinctive package  or  trade  name  or  trade-mark  which  is 
strongly  presented  is,  investigation  indicates,  a  strong 
factor  in  building  up  cumulative  demand  for  any 
product,  and  while  the  methods  described  may  not 
appear  unusual,  they  are  winning  out  every  day. 


MAKING  THE  PRODUCT  STAND  BACK  OF 
YOUR  SELLING 

DOES  the  success  of  a  business  depend  upon  its 
salesmen — upon  the  men  on  the  firing  line 
holding  the  blank  with  the  dotted  hne?  A 
smart,  a  very  smart  salesman  will  tell  you  '  Yes '  right 
away;  and  then  he  will  go  on  to  give  you  the  history 
of  the  men  in  this  country  who  have  been  made  rich 
by  their  salesmen."  So  says  an  executive  who  has 
seen  nearly  every  angle  of  seUing,  with  five  years  on 
the  road,  five  years  as  sales  manager,  five  years  as 
general  manager  and  five  years  as  president — 20  years 
of  selHng  in  all.  The  result  of  his  experience  and  of 
his  observation  of  nearly  every  selling  success  in  two 
decades  is  expressed  in  these  words: 

''Three-quarters  of  selling  work  depends  on  right 
fundamental  policies ;  the  man  on  the  Hne  does  the  rest. 
"Modern  merchandising,"  he  says,  "does  not  depend 
on  'putting  things  over'  in  regardless  fashion.  The 
cleverest  salesman  in  the  world,  the  best  writer  of 
advertisements  in  the  world,  cannot  alone  continue 
to  make  sales  of  anything  which  has  not  in  itself 
selling  merit;  and,  on  the  other  hand,  the  worst  sales- 
man in  the  universe  supplemented  by  the  worst  copy 
writer  in  the  universe  cannot  avoid  making  at  least 
some  sales  of  an  article  which  has  selling  merit  in  it. 
"This  country  has  stopped  buying  from  a  man — it 
buys  an  article.  If  the  article  is  good  it  will  buy  from 
a  bhnd  mute,  but  if  the  article  is  bad  it  will  buy  more 

192 


BACKING  UP  YOUR  SELLING  193 

than  once  from  a  golden  tongue.  Real  selling  begins 
with  the  conception  of  the  article,  goes  through  every 
branch  of  the  business,  and  the  salesman  should  be 
not  a  mere  individual  but  the  interpreter  to  the  buyer 
of  all  the  selling  skill  which  the  article  carries.  With 
the  passing  of  rough-and-ready  buying  has  gone  rough- 
and-ready  selling.  Selling  is  not  persuasion — it  is 
demonstrations  of  the  value  of  the  goods. 

''Sales  are  founded  on  the  customer's  confidence  in 
the  goods.  There  is  no  hypotism  in  the  dealing;  if 
hypnotism  be  needed,  then  something  is  the  matter 
with  the  product  sold;  cleverness  and  trickery  are  not 
salesmanship.  No  salesman  can  honestly  sell  anything 
unaided ;  he  may  persuade  a  certain  number  of  people 
during  a  certain  period  of  time  to  buy,  but  I  do  not 
call  that  selling.  I  might  induce  10-year-old  boys  to 
buy  moustache  combs  by  telling  them  that  the  combs 
invariably  raised  hair  on  the  lips  of  the  constant  users. 
But  that  would  not  be  selling.  Real  selling  is  mutual; 
it  is  bringing  to  a  man  something  that  he  needs. 

*'If  you  view  selling  in  this  light  (and  I  think  it  is 
the  only  selling  which  is  worth  talking  about)  then  it 
is  easily  seen  that  the  large  factor  in  the  success  of 
any  business  should  be  contributed  by  the  manage- 
ment rather  than  by  the  man  on  the  street.  In  fact 
I  think  that  it  is  unfair  to  put  out  a  man  and  expect 
him  to  get  orders  unless  the  management  has  done  its 
part.     Now,  what  is  seUing  behind  the  line? 

"It  is  this:  Giving  the  salesman  something  which 
contains  a  real  selling  idea,  finding  the  market,  pre- 
paring the  market,  and  then  leading  the  salesman  into 
it  with  a  full  knowledge  of  both  the  product  he  is 
expected  to  sell  and  the  market  in  which  he  is  ex- 
pected to  sell." 

Now,  that,  of  course,  is  getting  right  down  to  funda- 
mentals. Sound  selling  behind  the  line  consists  mainly 
of  a  foundation  of  sound  fundamental  principles. 


194         MARKETING  PLANS  AND  POLICIES 

Investigation  of  a  number  of  outstanding  selling 
successes  emphasizes  just  how  important  it  is  to  get 
the  foundation  built  right.  And  comparison  of  basic 
policies  shows  that  they  can  all  be  included  roughly 
under  the  following  three  heads:  (1)  getting  a  selling 
idea  in  the  product;  (2)  finding  the  markets;  and 
(3)  following  up  selling  with  service. 

First  comes  putting  a  selling  idea  into  the  product. 
Worded  a  bit  differently  this  first  policy  is  simply 
having  for  sale  a  product  that  somebody  wants. 

"PUT  THE  SELLING  IDEA  INTO  THE  GOODS,"  IS  THE  ADVICE 
OF  ONE  PROGRESSIVE  BUSINESS  MAN 

"The  selling  idea  in  the  goods  is  the  most  important 
element  in  selHng,"  says  a  prominent  sales  manager. 
"Take  Uneeda  biscuits — the  form,  the  packing,  and 
the  name  sold  them;  the  Ford  car  was  sold  when  the 
selling  idea  of  a  low-priced  and  durable  car  became 
mechanically  possible;  the  big  selling  force  of  the 
cash  register  was  in  the  machine  itself  and  the  same  is 
true  of  the  adding  machine,  the  phonograph — in  fact 
of  all  the  big  selling  successes.  Most  of  the  selling 
was  done  before  a  salesman  was  engaged.  They  had 
in  them  the  user's  viewpoint,  and  all  that  was  left  to 
be  done  to  sell  them  was  to  bring  the  facts  about  them 
to  the  attention  of  the  buyer.  Put  the  selling  idea— 
the  market  appeal — into  the  goods  themselves." 

"SelHng  ideas  are  put  into  goods  by  the  factories 
which  make  them,"  says  the  president  of  a  typewriter 
concern,  "and,  therefore,  the  factory  should  know  the 
consumer.  It  would  be  better  if  the  buyer  could 
personally  supervise  the  manufacture,  but,  since  that 
is  not  possible,  the  factory  must  go  to  the  consumer 
through  the  medium  of  the  agent.  The  factory  can 
make  sales  by  keeping  the  design  in  line  with  the 
market  demand  for  the  product.  It  can  lose  a  lot  of 
sales  by  remaining  hidebound  on  design. 


BACKING  UP  YOUR  SELLING  195 

"Look  at  oar  experience  in  Russia.  I  found  that 
the  machines  were  not  selling  as  fast  as  they  should. 
I  knew  the  market  was  there.  If  the  agents  could 
not  sell,  it  was  the  fault  of  the  goods.  I  looked  closely 
into  the  conditions  of  use  and  discovered  that  all  the 
typists  were  males,  and  mostly  big-handed  males  at 
that.  We  had  been  selhng  them  keyboards  designed 
for  the  slender  fingers  of  American  girls.  Of  course  the 
heavy,  one-fingered  smash  of  the  Russian  clerk  usually 
caught  a  couple  of  keys.   We  widened  the  keys  for  them. 

''The  machines  with  the  big  keyboards  sold  well, 
bat  still  they  did  not  sell  as  well  as  I  thought  they 
should.  Something  was  still  lacking.  I  found  that 
something  and  here  is  how  I  found  it. 

"One  day  I  caught  a  Russian  holding  his  sides  with 
laughter  as  he  pointed  to  an  American  automobile; 
I  could  not  see  anything  funny.  The  car  seemed  to  be 
a  particularly  good  one.  But  the  Russian  continued 
to  laugh  and  sputter  over  his  joke. 

''  'Look  at  the  coffin  on  wheels,'  he  chuckled,  *so 
smooth,  so  black — just  like  a  coffin.' 

''There  was  the  trouble  with  our  machine  in  Russia! 
The  only  thing  that  is  all  black  in  Russia  is  a  coffin — 
they  like  heaps  of  gilt  and  color.  The  motor  reminded 
the  man  of  a  coffin,  because  it  was  black  and  shiny. 
Our  machine  was  black  and  shiny;  probably  it  called 
to  mind  a  coffin.  I  cabled  home  to  decorate  the  next 
lot  of  machines;  when  they  came  through  they  looked 
more  like  Byzantine  masterpieces  than  anything  else. 
It  was  the  touch  of  color  that  had  been  lacking. 
Merchants  bought  the  new  ghttering,  gorgeous 
machine  as  much  for  decoration  as  for  use!  The 
brightness  cheered  up  their  offices. 

"The  design  must  never  become  settled.  The 
tendency  of  the  factory  is  always  to  adhere  to  the 
design  which  it  beheves  in:  What  it  thinks  is  not  of 
the  sHghtest  moment — because  the  factory  is  making, 


196         MARKETING  PLANS  AND  POLICIES 

not  buying.  The  best  is  that  which  the  pubHc  deter- 
mines to  be  best,  and  since  the  pubHc  taste  shifts,  the 
design  must  also  shift.  Automobile  makers  have 
constant  battles  between  the  sellers  and  the  factory. 

"We  employ  men  to  talk  with  customers,  with  stenog- 
raphers, with  every  machine  user — to  discover  if  they 
do  not  hke  our  machine  and  if  so,  why.  The  10-dollar- 
a-week  girl  can  give  pointers  on  many  practical 
matters;  we  changed  the  touch  considerably  on  sug- 
gestions received  in  this  fashion.  Complaints  are 
splendid  suggestions  for  betterments;  they  are  to  be 
investigated  not  only  to  satisfy  the  customer,  but  also 
to  locate  weak  spots  in  the  product  or  in  the  organi- 
zation. But  one  cannot  depend  solely  on  expressed 
dissatisfaction  for  spurs  to  progress;  many  a  man  who 
is  dissatisfied  will  not  tell  you  about  it.  You  must  find 
him  through  eternal  digging  among  your  buyers. 

"It  is  not  easy  to  get  the  factory  around  to  this 
selling  viewpoint.  But  it  can  be  done.  I  do  it  by 
considering  myself  a  manufacturer  of  an  article  to  be 
sold — not  merely  a  manufacturer.  Then  I  bring  the 
factory  management  around  to  the  idea  that  it  is 
making  something  to  sell  and  that  good  factory 
methods  must  also  be  good  selhng  methods.  I  tell 
them  what  people  are  saying  about  the  product — and 
they  are  interested.  They  now  consider  themselves 
the  main  selHng  force  and  are  hard  after  suggestions 
for  improvements  from  the  men  who  are  actually  on 
the  sales  firing  line." 

Another  concern,  a  leader  in  its  line,  feels  that  it  is 
rendering  a  distinct  service  to  the  pubhc  in  manu- 
facturing and  selhng  its  product— a  necessity— simply 
by  putting  into  the  goods  all  the  value  it  can,  and 
selling  them  at  the  lowest  prices  it  can  reasonably  ask. 
It  continually  urges  its  workers,  from  factory  hands  to 
salesmen,  to  live  up  to  its  ideal  of  service,  in  workman- 
ship and  in  business  relations  with  dealers  and  pubhc. 


BACKING  UP  YOUR  SELLING  197 

This  idealism,  if  that  is  what  it  should  be  called,  is 
rapidly  taking  hold  in  business.  The  spirit  of  the  crafts- 
man is  displacing  the  spirit  of  the  profiteer.  As  in 
what  one  writer  calls  the  ''hand-made  age"  so  today 
many  manufacturers  are  building  into  their  goods  the 
enthusiasm  of  master  craftsmen — an  enthusiasm  for 
painstaking  care  and  perfect  workmanship. 

The  growing  popularity  of  guarantees  is  an  indi- 
cation of  the  development  of  this  new  spirit.  Although 
some  concerns  selling  goods  still  make  several  reser- 
vations with  their  ''guarantees"  others  put  on  their 
goods  guarantees  which  really  mean  something. 

Take  this  one,  for  example: 

You  are  entitled  in  buying  Ladden  &  Company  Clothes  to  a 
most  positive  assurance  of  your  satisfaction. 

Every  dealer  in  our  clothes  is  authorized  to  say  this  to  you: 

"Every  garment  made  by  and  bearing  our  label  is  guaranteed 
to  be  of  All-Wool  or  Wool  and  Silk  fabrics  with  no  "mercerized" 
or  other  cotton  added;  to  be  thoroughly  shrunk  before  cutting; 
seams  sewed  with  pure  silk  thread;  tailored  in  clean,  sanitary 
shops;  and  to  be  free  from  defect  of  material  and  workmanship." 

More  than  that:  the  dealer  is  authorized  to  say  that  if  the 
clothes  are  not  right,  or  not  satisfactory,  3'our  money  will  be 
refunded  without  question  or  quibble. 

With  such  guarantee  it  is  evident  that  the  manu- 
facturers have  every  confidence  in  their  products. 
There's  no  ground  for  quibbling;  if  the  goods  are  not 
right,  "bring  them  back" — new  goods  or  your  money 
refunded.    In  short,  the  goods  have  the  selling  idea. 

It  is  easy  to  see  why  sellers  are  wilhng  to  accept 
responsibihty  for  the  service  the  goods  render  after 
the  goods  are  sold.  This  attitude  is  largely  explainable 
by  the  "selling  idea" — or  the  seller's  confidence  in 
the  service  qualities  of  the  goods  he  sells. 

That  the  seUing  idea  in  goods  is  not  a  constant 
factor,  business  men  agree.  Conditions  may  come 
about,  as  in  recent  years,  which  may  call  for  radical 


198        MARKETING  PLANS  AND  POLICIES 

readjustments  of  methods  and  policies.  What  is  a 
powerful  selUng  idea  today  may  become,  tomorrow,  a 
liabiHty  rather  than  an  asset  to  a  business. 

One  concern,  manufacturing  several  items  of  office 
equipment  and  machinery,  went  so  far  as  to  change  the 
whole  character  of  its  products.  Because  of  pohtical 
and  business  conditions,  demand  for  its  products  was 
reduced  virtually  to  nothing,  whereupon  the  company 
set  out  to  manufacture  certain  kinds  of  optical  glass 
for  which  there  was  need.  Soon,  in  a  plant  where 
there  had  never  been  a  thought  of  manufacturing  glass, 
many  phases  of  glass  making  were  going  full  swing. 
The  change  was  necessary  to  turn  out  goods  carrying 
a  selling  idea  which  was  effective. 

FINDING  THE  MARKETS  SOMETIMES  IS  DIFFICULT,  BUT  HERE 
ARE  A  NUMBER  OF  TESTED  METHODS 

Going  on  now  to  our  second  point — finding  the 
markets — one  executive  who  is  preeminently  a  sales- 
man, likens  seUing  management  to  commanding  an 
army,  and  says  that  the  management  must  find  the 
markets  just  as  a  commander  must  control  from  head- 
quarters all  movements  of  troops  and  guns. 

"It  is  to  be  supposed,"  says  this  man,  "that  the 
president  and  the  sales  manager  have  a  knowledge  of 
the  markets.  Otherwise  why  should  they  hold  execu- 
tive offices?  The  larger  opportunities  in  salesmanship 
— the  views  of  the  strategic  maps  and  the  relations 
are  available  for  the  generals  and  not  for  the  privates. 

"I  was  in  a  European  capital  when  the  war  broke 
out,  and  I  got  to  thinking  about  the  many  needs  of 
the  government,  and  where  my  goods  would  fit  in. 

"The  big  thing  then  in  hand  was  the  raising  of  an 
army.  That  gave  me  the  lead;  I  went  down  to  the 
War  Office  and  suggested  that  they  would  soon  need 
machines.  It  had  not  occurred  to  the  officer  whom  I 
saw.     He  agreed,  and  went  on  to  say: 


BACKING  UP  YOUR  SELLING  199 

"  'Yes,  we  shall  need  machines  by  and  by.  Cer- 
tainly we  shall  have  to  buy  some.  Take  it  up  with  me 
in  a  couple  of  weeks.' 

"  'You  need  them  now.  They  will  help  a  lot,'  I 
answered.  'I  will  cable  today  for  250  machines  to 
come  over  on  the  first  fast  ship.' 

"  'All  right,'  he  returned.  'Probably  we  shall  take 
them.' 

"They  did  take  them  and  over  10,000  more.  It  was 
my  business  to  have  the  larger  view.  If  I  did  not 
have  it  we  should  not  long  survive." 

"We  are  selling  a  lot  of  our  goods  in  India,"  says 
another  sales  executive,  "and  Pears'  soap  did  the  trick. 
It  was  this  way.  I  had  thought  of  India  as  a  market 
but  I  was  afraid  that  the  people  were  too  crude.  I 
talked  conditions  over  with  a  chance  acquaintance 
just  back  from  India. 

"  'What  did  you  sell  there?'  I  asked. 

"  'Pears'  soap.' 

"  'Pears'  soap?  By  golly,  if  they  use  English  soap 
they  are  'civihzed'  enough  to  use  my  goods!  I  will 
send  some  of  our  men  down  there.' 

"The  agents  went  out  and  today  they  are  seUing 
all  through  the  Orient.  The  goods,  of  course,  have 
been  made  to  fit  the  market. 

"Pointing  the  way  to  the  market  is  a  function  of  the 
general  staff  of  the  business.  No  salesman  can  be 
expected  to  have  the  larger  view;  he  is  absorbed  in 
the  specific  sales  just  as  the  private  is  absorbed  in  his 
own  little  part  in  the  battle." 

This  brings  us  to  our  third  and  last  point— following 
up  seUing  with  service.  No  discussion  of  seUing  funda- 
mentals would  be  complete,  business  men  agree,  with- 
out a  word  as  to  service,  for  service  is  the  very  bed- 
rock upon  which  successful  business  is  built. 

Business  service  has  two  meanings,  investigation 
shows.     First,  then,  we  may  discuss  service  broadly. 


200        MARKETING  PLANS  AND  POLICIES 

"The  most  important  fact  in  any  business,"  says 
a  man  whose  business  counsel  is  widely  sought,  ''is 
the  idea  back  of  it.  A  concern  may  be  carrying  on  a 
business  with  a  short-sighted  view  which  takes  in 
only  immediate  profits,  and  may  resort  to  any  methods 
which  will  increase  these  profits  a  little. 

"On  the  other  hand,  the  business  may  represent  a 
sincere  effort  to  be  of  service  to  other  people,  with  fair 
reward  for  service  rendered.  Other  things  being  equal, 
such  a  concern  builds  for  greater  profits  in  the  end. 

"That  is  why  I  say  that  the  idea  underlying  a  busi- 
ness is  the  most  important  fact  in  connection  with  it. 
Many  a  concern  has,  to  my  knowledge,  increased  its 
business  tremendously  by  taking  its  selling  efforts  out 
of  the  'Sell!  Sell!  Sell!'  class  and  putting  it  on  a 
service  basis  all  the  way  through." 

AFTER  ALL,  THE  BIG  IDEA  BEHIND  RIGHT  SELLING  IS  GOOD 
SERVICE,  YOU'LL  ALL  AGREE 

In  any  business  so  built  upon  the  principle  of  service 
in  this  larger  sense,  service  as  it  is  apphed  to  repairs, 
dehveries,  and  so  on,  is  taken  care  of  alm.ost  auto- 
matically. If  the  spirit  of  serving  exists  in  a  business 
it  is  reasonably  sure  to  give  good  service,  all  agree. 

"Of  what  use  is  good  salesmanship  of  a  good  article 
if  the  service  claims  are  not  met?"  says  a  prominent 
executive.  "Suppose  a  purchaser  calls  up  about  a 
small  repair  and  is  answered  by  a  stupid,  indifferent 
clerk.  Is  the  salesman  who  made  the  sale  going  to 
have  a  good  chance  to  make  another  sale  to  him? 

"Whether  in  Russia,  England,  India,  Sweden,  or 
Japan,  we  in  our  business  try  to  back  up  the  salesman 
and  make  good  on  every  promise.  We  can  give  as 
good  service  in  Tokyo  as  in  New  York  and  I  should 
not  expect  any  men  to  sell  in  Tokyo  if  they  could  not 
offer  all  that  can  be  given  anywhere.  It  would  not  be 
a  square  deal  to  them  in  their  work." 


BACKING  UP  YOUR  SELLING  201 

"I  rarely  stop  in  a  city,"  says  the  president  of  a 
concern  making  an  article  of  office  use,  "without 
buying  one  or  more  of  my  own  machmes,  and  1  also 
test  out,  watch  in  hand,  the  service  that  I  am  given 
on  repairs.  I  call  up  from  my  hotel,  or,  sometimes,  il 
I  think  that  I  shall  not  be  recognized,  I  go  directly  to 
the  store.  I  want  to  know  what  our  agents  are  saying 
to  customers  and  how  the  management  is  Uving  up  to 
what  they  have  promised  or  should  have  promised. 

"A  few  short-sighted  salesmen  may  imagine  that 
this  is  spying.  On  the  contrary,  it  is  helping  them  to 
make  more  sales.  Service  is  given  in  the  interest  ot 
sales;  if  the  service  is  bad,  the  news  will  surely  get 
about  and  the  men  will  find  that  sales  are  harder  to 
make.  One  unfulfilled  promise  may  counteract  a  lull 
page  of  advertising  which  cost  heavily." 

Analysis  of  these  three  selling  fundamentals  em- 
phasizes the  statement  made  previously  m  this  sec- 
tion that  successful  seUing  is  75%  behind  the  line 
and  25%  on  the  fine— 75%  management,  and  25% 
actual  selling. 

"So  strongly  do  I  feel  the  truth  of  this,"  says  the 
same  man— he  is  president  of  his  company,  by  the 
^ay— "that  when  one  of  my  men  falls  down,  I  take 
it  as  a  personal  defeat  for  myself  and  not  for  him.  I 
know  perfectly  well  that  I  have  omitted  to  do  some- 
thing which  I  should  have  done,  for  if  I  had  done  my 
part  that  man  could  not  have  failed. 

"Were  I  a  young  salesman  I  would  not  work  for  a 
company  which  refused  to  do  less  than  75%  of  the 
selling.  I  would  not  waste  my  time  with  it.  When  on 
the  mat  being  questioned  as  to  my  abihty,  I  would 
take  the  chance  to  find  out  something  of  the  abihty 
of  my  prospective  employer.  I  would  go  straight  for 
him  with  a  speech  about  like  this : 

"  'What  do  you  know  about  selling?  My  success 
will  depend  25%  upon  what  I  do  and  75%  on  what 


202        MARKETING  PLANS  AND  POLICIES 

you  have  ah'eady  done  to  make  selling  possible.  Can 
you  give  me  any  assurance  that  I  shall  not  waste  my 
time  with  you  and  your  products? ' 

"We  have  heard  a  lot  on  how  the  employer  ought 
to  select  his  salesmen,  but  how  about  the  selection  of 
the  employer?  There  are  two  sides  to  hiring.  It  is 
more  important  for  a  young  man  to  select  a  good  boss 
than  for  the  boss  to  select  a  good  man;  the  man  has 
more  at  stake.  Probably  the  average  run  of  employers 
would  be  insulted  at  the  very  suggestion  of  the  idea 
that  he  did  not  know  all  there  was  to  be  known  about 
selling.  But  the  first-class  employer  would  not  be 
insulted;  he  would  get  the  point.  He  would  know 
that  the  man  before  him  had  grasped  the  real  idea  in 
selling;  that  it  was  the  selling  behind  the  line  which 
counted — the  salesmanship  in  the  management  that 
would  make  or  break  him  in  the  long  run. 

''There  is  salesmanship  in  the  selection  of  em- 
ployers; the  best  salesmen  are  those  who  know  how 
to  select  the  right  goods  to  sell.  One  might  as  well 
agree  to  harvest  on  shares  a  field  which  has  never  been 
sown  as  to  engage  to  sell  in  an  unprepared  market — 
to  sell  goods  that  are  not  ready  for  the  market  or  in 
a  market  which  is  not  ready  for  the  goods." 

Finally,  it  is  evident  that  sifting  down  to  funda- 
mentals makes  for  straighter  thinking  whether  the 
problem  has  to  do  with  selling  or  any  other  activity. 

The  three  fundamentals  which,  investigation  points 
out,  underlie  nearly  all  conspicuous  selling  successes, 
emphasize  the  importance  of  getting  the  other  man's 
ideas.  To  be  successful  a  seller  must  offer  an  article 
that  is  wanted.  And  knowing  what  is  wanted  involves 
finding  out  what  the  other  fellow  is  thinking. 


TOURING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbohze  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  PubUca- 
tions  are  now  housed  is  a  permanent  counteTpart 
in  stone  of  the  building  that  business  men  knew 
so  well  during  the  war. 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OP  BUSINESS  STANDARDS 
of  thm  A.  W.  SHAW  COMPANY 


SECTION  8 
Fitting  Salesmen  for  Bigger  Work 


FITTING  SALESMEN  FOR  BIGGER  WORK 

TTERS — just    letters — but    at   the   same    time 
1  letters  that  differ  utterly  from  the  cold,  drab 
notes  which  some  concerns  send  out  to  men  on 


the  road,  keep  the  sales  manager  of  one  Michigan 
concern  in  close  daily  touch  with  his  ''boys"  on  the 
road.  His  letters  always  give  the  man  away  from 
home  some  little  item  of  local  news.  It  may  be  base- 
ball, or  some  item  of  interest  about  home  politics,  or 
a  personal  word  from  a  friend  of  the  salesman,  or  a 
bit  of  factory  news,  but  always  it  is  something  intimate 
and  warming  to  the  spirit. 

Each  letter,  however,  drives  home  some  little  plan 
in  the  sales  campaign,  as  the  hint  in  the  letter  which 
follows,  that  a  grade  A  line  ought  to  be  pushed.  This 
sales  manager  has  served  many  years  on  the  road  him- 
self, and  he  knows  the  trials  and  disappointments  of 
the  salesmen.  He  knows  the  word  of  cheer  is  appre- 
ciated. His  are  not  mere  "ginger"  letters.  Here  is  one: 

Dear  Jim: 

Ty  Cobb  got  a  home  run,  two  triples  and  a 
single  in  four  times  at  bat  this  afternoon.  I 
wish  you  could  have  been  here  to  go  out  to 
the  game  with  me.  It  was  a  corker. 

By  the  way.  your  last  report  from  Waco 
shows  that  you  have  your  eye  on  the  ball,  too. 
You  batted  about  .800  in  Waco  and  I'm  betting 
on  you  to  increase  your  average  in  Austin. 
Don't  forget  that  Grade-A  line.  It's  always 
good  for  a  hit. 

65 

Copyright,  1921.  by 

A.  W.  SHAW  COMPANY 

as  a  part  of  the  Shaw  Selling  iSeries 


66  BUILDING  UP  A  SALES  FORCE 

But  the  letters  form  only  part  of  the  plan  this  sales 
manager  uses  in  training  his  salesmen  and  keeping 
them  informed  in  the  methods  and  plans  of  the  house 
after  and  while  they  are  on  the  road. 

The  company's  personal  contact  with  salesmen  starts 
as  soon  as  they  join  the  company.  First,  they  are  put 
in  the  factory  for  a  few  weeks  to  learn  how  the  product 
is  made.  The  sales  manager  keeps  a  watchful  eye  on 
their  progress.  When  the  man  is  ready  to  start  out  he 
knows  the  line  thoroughly.  He  is  trained  so  he  can 
go  into  the  customer's  shop  arid  demonstrate  the 
article  effectively.  And  his  sales  education  continues 
through  letters  like  the  one  given  on  the  preceding 
page,  after  he  is  on  the  road. 

Most  sales  managers,  investigation  indicates,  use 
one  or  a  combination  of  two  or  three  methods  to  train 
their  salesmen  to  the  highest  point  of  effectiveness. 
These  methods  are: 

1.  By  salesmanship  schools 

2.  By  road  training  with  experienced  salesmen 

3.  By  letters  after  the  man  is  on  the  road 

In  establishing  schools  for  salesmen  many  concerns 
have  these  two  objects  in  view:  first,  to  give  intensive 
training  to  men  ah'eady  qualified  for  the  sales  force, 
and,  second,  to  train  factory  or  office  men  to  take  sales 
positions  and  hold  them  effectively. 

One  wholesaler  holds  schools  for  salesmen  in  different 
parts  of  the  country  several  times  each  year.  In  each 
district  monthly  meetings  of  salesmen  are  held,  and 
many  branches  have  weekly  meetings  to  discuss  some 
feature  of  the  goods.  An  important  point  in  the 
pohcy  in  connection  with  these  sales-training  schools 
is  that  the  company  does  not  give  a  salesman  the  train- 
ing course  until  he  has  been  tried  out  in  the  field  and 
has  made  good.  In  this  way  the  company  saves  both 
time  and  money  in  training  poor  material. 


TRAINING  AND  DEVELOPING  67 

A  concern  which  manufacturers  a  line  consisting  of 
several  thousand  articles,  for  years  faced  the  problem 
of  getting  the  salesmen  to  understand  and  push  the 
full  Hne.  New  salesmen  had  to  gather  this  knowledge 
gradually  on  the  road  through  the  medium  of  weekly 
or  bimonthly  meetings  with  district  managers,  and  the 
results  were  decidedly  unsatisfactory. 

HERE'S  A   SCHOOL   FOR  SALESMEN   WHICH  TURNS  OUT  THE 
MEN  WELL  EQUIPPED  TO  GO  AFTER  BUSINESS 

The  company  decided  to  establish  a  school  for  sales- 
men. This  school  is  under  the  immediate  directions  of 
the  general  sales  manager  and  an  instructor  who  is 
familiar  with  the  manufacturing  details  of  the  business. 
The  course  of  study  is  intensive.  The  first  month  is 
spent  in  actually  handling  t^e  goods  and  filling  orders 
in  the  finished  product  stock  room.  Here  the  men 
become  familiar  with  the  styles  and  *'  put-ups  "  of  stock 
items.  With  this  preliminary  experience  they  are  the 
better  fitted  to  grasp  quickly  the  details  of  the  manu- 
facturing end.  The  last  two  months  of  the  course  they 
spend  in  the  manufacturing  departments.  They  are 
shown  exactly  how  each  article  is  made  and  what  pre- 
cautions and  care  are  used  in  maintaining  quality. 
Each  line  of  goods  is  taken  up  by  itself,  so  that  the 
students  will  be  thoroughly  conversant  with  the  steps 
through  which  it  passes.  Each  detail  of  manufacturing 
is  pointed  out  and  its  relation  to  the  prices  of  the  goods 
explained  to  students  in  detail. 

Another  subject  which  is  covered  is  the  study  of 
materials  which  enter  into  the  products.  Wherever 
possible  this  is  done  by  using  stereopticon  slides  to 
illustrate  the  method  of  manufacturing.  In  the 
laboratory  salesmen  learn  how  standards  of  quality  are 
determined  and  watched  all  the  way  through. 

Paralleling  the  study  of  materials  and  manufacturing 
are  a  series  of  selling  lectures  given  by  the  managers 


68  BUILDING  UP  A  SALES  FORCE 

of  the  various  merchandising  departments  of  the 
concern.  The  lectures  are  based  upon  the  cumulative 
knowledge  which  these  men  have  obtained  from  their 
experience  with  the  entire  selling  organization.  The 
student  is  shown  how  to  use  his  samples ;  the  uses  to 
which  each  article  can  be  put ;  the  arguments  for  them ; 
how  to  meet  the  arguments  against  them;  the  points 
in  which  they  are  superior  to  those  of  other  makes; 
in  fact  everything  that  a  salesman  ought  to  know  about 
his  goods.  These  selling  talks  always  are  given  at  the 
end  of  the  period  devoted  to  studying  manufacture. 

At  stated  intervals  during  the  course  more  general 
lectures  are  given.  The  subjects  are  along  broader 
lines  and  are  always  given  by  one  of  the  men  at  the 
head  of  the  company.  A  few  talks  that  have  been 
given  are:  "The  past  and  future  of  the  company,"  by 
the  president  of  the  concern;  ''Ideals  and  policies," 
by  the  treasurer;  ''How  the  factory  cooperates  with 
the  salesman,"  by  the  works  manager;  "Selling  values 
of  conmiodities,"  by  one  of  the  directors;  "Retail- 
store  selling,"  by  one  of  the  directors;  "Advertising 
and  selling,"  by  the  advertising  manager;  and  "The 
buyer's  impressions  of  salesmen,"  by  the  general 
purchasing  agent  of  the  company. 

These  general  lectures,  aside  from  the  value  of  the 
subjects  themselves,  give  the  students  the  opportunity 
to  meet  and  hear  those  who  are  responsible  for  the 
policies  and  management  of  the  company,  and  they 
help  to  impress  them  with  the  spirit  of  cooperation 
that  exists  from  top  to  bottom  of  the  organization. 

The  personal  side  of  the  salesman's  duties  is  covered 
in  talks  given  by  the  general  sales  manager.  Salesmen's 
habits,  dress,  appearance,  conduct,  and  manner  of 
speech  are  discussed  in  connection  with  the  business. 

The  balance  of  the  training  course  is  made  up  of  the 
study  of  order  writing,  pricing,  and  delivery.  The 
subject  of  credits  and  collections  is  carefully  gone  over. 


TRAINING  AND  DEVELOPING  69 

Written  examinations  are  given  weekly  to  enable  the 
students  to  digest  all  the  work  of  the  week  and  to 
check  up  their  progress.  These  examinations  are  con- 
sidered vital  to  the  success  of  the  training  course. 

At  the  end  of  the  training  period  at  the  factory  the 
men  are  assigned  again  to  a  territory.  They  receive 
in  the  field  the  final  touch  to  their  education,  which  is 
learning  how  to  sell.  It  can  be  seen  that  under  this 
present  plan  the  new  salesman's  experience  is  the 
reverse  of  his  experience  under  the  old  method.  For- 
merly he  sold  first  and  gradually  acquired  his  knowl- 
edge of  his  product;  now  he  acquires  his  knowledge 
first  and  then  is  taught  to  sell  effectively. 

One  company  which  makes  grinding  machines  re- 
cently estabUshed  a  school  to  help  its  salesmen  get  a 
grasp  of  the  engineering  problems  which  constantly 
arise  in  the  sale  of  its  product.  This  knowledge,  the 
company  believes,  can  be  obtained  only  through  the 
actual  handling  of  the  machines.  The  company 
prefers  graduates  of  technical  or  trade  schools  as  sales- 
men, and  it  gives  them  a  two-year  training  course  in 
the  various  shop  and  office  departments  of  the  works, 
before  sending  them  on  the  road. 

New  men  first  spend  a  week  in  inspection  of  various 
departments  of  the  works,  observing  closely  the 
different  methods  of  manufacture  of  the  different  parts 
of  the  products,  and  then  writing  a  report  on  the  work 
which  they  have  seen.  This  is  followed  by  work  in  the 
repair  shop  of  the  company.  This  leads  to  work  in  the 
shops,  operating  cylindrical,  surface,  and  internal 
grinding  machines,  and  inspecting  grinding  work. 
This  is  followed  by  six  weeks  training  in  the  trueing 
and  bushing  room,  where  the  wheels  are  finished  ready 
for  testing  and  inspecting.  Then  they  are  taken 
through  the  inspection  and  packing  room  to  the  stock 
room.  This  is  succeeded  by  work  in  the  drafting  room 
of   the  engineering  department,   six  months  in    the 


70  BUILDING  UP  A  SALES  FORCE 

mechanical  laboratory,  where  tests  are  constantly  being 
made  in  an  attempt  to  discover  better  methods  of 
making  grinding  wheels  and  better  adaptations  of 
wheels  to  given  types  of  work.  Some  time  also  is 
spent  in  the  cost  department.  In  the  order  depart- 
ment they  trace  orders  through  the  shop  to  see  that 
they  are  delivered  on  time,  and  short  periods  are  spent 
in  the  credit  department,  publicity  department,  re- 
fractory department,  and  so  on. 

NOT   ALL  THE  SCHOOL   INSTRUCTION   IS   ALONG   SALES  LINES; 
AS  YOU  READ  YOU  WILL  SEE  THE  REASON  WHY 

During  all  this  time  these  men  are  under  the  super- 
vision of  the  foremen,  and  are  given  instruction  by  them 
in  the  different  technical  processes  which  are  carried 
on  in  each  department.  While  they  are  in  the  stock 
department  a  general  review  is  taken  of  all  the  stages 
through  which  the  product  goes  previous  to  reaching 
that  department,  and  a  comprehensive  examination  is 
given  the  student,  which  shows  plainly  whether  or  not 
the  young  man  has  taken  advantage  of  his  oppor- 
tunities up  to  that  point.  No  regular  classroom  work 
is  offered  to  these  men,  as  it  is  assumed  that  they — the 
majority  of  them  being  college  or  technical-school 
graduates — have  an  ample  training  along  the  lines 
which  would  be  taught  in  a  classroom. 

One  sales  manager  was  ''up  against  it"  because  he 
could  not  get  men  trained  to  sell  a  technical  specialty 
to  fill  several  of  his  vacant  territories. 

He  noticed  several  likely  looking  men  in  the  factory 
and  decided  to  try  an  experiment.  A  notice  was 
posted  offering  training  in  salesmenship  to  those  inter- 
ested. No  promise  of  rewards  of  sales  jobs  was  made, 
but  about  350  factory  men  attended  the  first  meeting. 
The  course  lasted  all  winter  and  in  the  spring  the  sales 
manager  had  20  men  ready  to  take  sales  jobs,  and  a 
supply  of  trained  men  for  future  vacancies. 


TRAINING  AND  DEVELOPING  71 

Another  concern  conducts  "owl"  or  night  classes 
for  its  factory  and  office  men  who  wish  to  get  into  the 
selling  end  of  the  business.  In  these  classes  special 
training  is  given  in  the  demonstration  and  handling 
of  the  product.  In  addition,  business  English,  Spanish, 
advertising,  public  speaking,  and  free-hand  drawing 
are  taught.  The  company  feels  that  public  speaking 
is  an  invaluable  aid  to  good  sales  presentation  and  the 
free-hand  drawing  is  considered  valuable  because  a 
sketch  often  will  drive  home  a  point  which  cannot  be 
explained  easily  in  words  alone. 

Road  training — the  second  method  we  laid  down  at 
the  beginning  of  the  section  — has  proved  successful  in 
many  firms,  and  coupled  with  this  road  training  has 
come  the  development  of  sales  manuals,  and  greater 
attention  to  the  salesman's  outfit.  One  food-products 
company  does  not  rely  on  training  in  the  office 
or  factory  to  develop  its  salesmen,  but  sends  the  men 
out  on  the  road  with  competent  instructors. 

It  has  six  or  seven  men  who  are  excellent  instruc- 
tors, but  who  are  not  particularly  productive  salesmen. 
It  has  therefore  been  found  economical  to  put  these 
men  to  training  new  salesmen. 

For  the  first  week  on  the  road  the  new  man  does 
nothing  but  listem  and  ask  questions  while  the  instructor 
analyzes  his  own  methods  for  the  benefit  of  the  student. 
The  following  week,  the  new  man  is  given  a  chance 
alone  in  a  small  territory.  Examination  of  his  orders 
and  his  reports  show  pretty  accm-ately  what  progress 
he  is  making.  He  is  urged  to  analyze  his  results  him- 
self and  if  he  feels  that  he  is  not  getting  the  results  he 
might,  he  may  send  for  the  instructor,  and  work  with 
him  another  period.  The  third  week  usually  is  spent 
with  the  instructor  again,  and  this  time  the  older  man 
does  the  listening  while  the  new  man  does  the  selling. 

The  goal  of  all  the  men  is  the  managership  of  one  of 
the  general  branches.    Calling  on  the  jobbing  trade  is 


72  BUILDING  UP  A  SALES  FORCE 

looked  upon  as  pleasant er,  and  it  is  better  paid  than 
the  retail  work.  The  company  urges  members  of  the 
sales  force  to  try  for  these  positions. 

Before  a  salesman  can  get  on  the  staff  of  one  com- 
pany which  makes  a  heating  appliance,  he  must  go 
through  a  long  period  of  training.  The  company  keeps 
squads  of  men  in  the  field  training  for  salesmen's  jobs 
all  the  time.  This  training  consists  mainly  of  sales- 
promotion  work.  Junior  salesmen  are  assigned  to  the 
territory  of  some  regular  salesman  and  they  make  a 
house-to-house  canvass  of  every  building  owner  in  the 
territory.  They  do  not  try  to  sell  any  goods  but 
merely  to  interest  prospects  in  the  company's  products. 
In  the  course  of  the  training  period  the  young  salesman 
meets  about  10,000  prospective  buyers.  He  can  take 
only  snap  judgment  of  these  prospects,  and  yet  must 
study  out  instantly  the  method  of  approach  which 
will  be  most  effective.  This  work  often  develops  casual 
prospects  into  good  customers. 

One  wholesale  sales  manager  believes  that  special 
training  is  necessary  to  prevent  new  salesmen  from 
getting  the  habit  of  sitting  around  idly  in  hotel  lobbies 
or  getting  the  idea  that  big  orders  can  be  taken  over 
the  telephone  without  involving  any  work. 

To  prevent  this  tendency  the  sales  manager  sends 
out  three  or  four  new  men  with  an  older  salesman. 
At  night,  they  hold  "experience"  meetings  at  which 
the  troubles  of  the  day  are  discussed  and  the  veteran 
advises  the  beginners  how  to  improve  their  methods. 
This  plan  has  proved  successful  both  from  the  edu- 
cational standpoint,  and  because  the  men  are  spurred 
up  to  get  as  many  orders  as  possible. 

No  amount  of  school  training  and  road  instruction 
is  of  much  value  unless  the  salesman  is  effectively 
equipped  to  show  his  goods,  according  to  one  sales 
manager.  He  declares  that  it  is  especially  important 
that  the  salesman's  equipment  be  up  to  date. 


TRAINING  AND  DEVELOPING  73 

"There  is  no  question,"  he  said,  "but  a  house  will 
be  better  represented  and  the  salesman  can  better 
present  his  proposition  with  a  compact,  neat,  ^id 
comprehensive  grip  or  outfit  to  use  in  his  seUing. 

"A  salesman  for  a  publishing  house  came  into  my 
office  the  other  day  and  painted  a  beautiful  word- 
picture  of  a  series  of  pamphlets  which  had  been  pre- 
pared for  manufacturers  to  distribute  to  their  sales 
force.  The  presentation  was  attractive  but  it  lacked 
the  force  in  itself  to  put  the  sale  across. 

AT  THE  PSYCHOLOGICAL  MOMENT  THE  SALESMAN  CAME 
FORWARD  WITH  A  CLINCHING  APPEAL 

"He  was  a  good  enough  salesman,  however,  to  have 
an  outfit  with  him,  and  the  folks  back  of  him  were 
far-sighted  enough  to  furnish  him  with  a  well-prepared 
outfit.  Just  as  I  began  to  wonder  what  these  pamphlets 
looked  like  he  produced  from  a  neatly  arranged  grip 
the  entire  series — spread  them  out  in  an  imposing 
array  across  my  desk,  and  what  was  the  result?  The 
buyer  naturally  could  have  nothing  but  admiration  for 
the  layout,  even  if  he  did  not  place  an  immediate  order. 
It  is  the  impression  he  makes  with  the  prospect  which 
counts  with  the  salesman,  and  the  outfit  helps  him  to 
make  a  good  one  if  it  is  of  any  account. 

"Many  of  the  mistakes  made  in  fitting  out  a  sales 
force  are  due  to  failure  on  the  part  of  the  home  office 
to  realize  that  their  salesmen  are  human  and  can  only 
carry  a  limited  amount  of  luggage.  Some  of  the 
trunks,  grips,  sample  cases,  and  portfoHos  loaded  onto 
the  poor  salesmen  would  make  even  old  Atlas  who 
held  up  the  world  shrink  from  the  task.  The  result 
in  most  instances  is  that  instead  of  utilizing  this  big 
supply  of  equipment  the  salesman  has  a  natural 
tendency  to  leave  most  of  it  behind.  He  gradually  gets 
so  that  he  doesn't  keep  it  up  to  date,  and  before  long 
the  entire  cost  of  the  equipment  is  a  loss  to  the  house. 


74  BUILDING  UP  A  SALES  FORCE 

''It  is  a  good  plan  to  prepare  a  salesman's  outfit  so 
it  can  be  changed  weekly,  monthly,  or  at  least  once 
every  two  or  three  months,  not  necessarily  in  a  radical 
way,  but  by  throwing  out  some  old,  stale  material  and 
putting  in  some  fresh  bits  of  helpful  matter  for  the 
salesman  to  show  his  trade.  The  value  of  this  changing 
has  been  realized  to  the  extent  that  the  looseleaf  or 
sectional  style  of  outfit  or  portfolio  has  developed  in 
tremendous  strides  in  the  last  few  years.  Instead  of 
the  old  bound  book  with  its  never-changing  contents, 
which  usually  had  little  or  no  interest  after  the  first 
call,  it  is  now  possible  for  the  well-equipped  salesman 
to  keep  up  interest  on  subsequent  calls  with  practically 
the  same  framework,  by  shifting  ''scenery."  And, 
after  all,  the  salesman's  abihty  to  get  the  order  depends 
considerably  on  the  message  he  has,  and  his  method  of 
approaching  the  buyer  and  presenting  the  subject. 
This  fresh  material  also  keeps  the  salesman  well  in- 
formed on  new  lines  the  house  is  putting  out. 

"One  of  the  best  solicitations  I  ever  heard  was  made 
by  a  publisher's  representative.  He  called  it  a  deaf- 
and-dumb  sohcitation.  He  came  in  with  a  few 
whispers,  centered  his  entire  argument  for  a  period  of 
five  minutes  or  so  on  the  one  dominating  point  where 
his  proposition  stood  out  above  competing  ones,  and 
drove  that  point  home  with  two  or  three  easily  directed 
references  to  a  small  ring  binder  which  he  pulled  out  of 
his  coat  pocket  at  the  psychological  moment.  The 
point  always  comes  to  my  mind  in  considering  sales 
work — how  much  better  that  solicitation  was  than  the 
average  long,  rambling  one,  which  attempts  to  cover 
too  big  a  field  and  leaves  no  definite  impression. 

"The  salesman's  outfit,  of  course,  must  be  so  con- 
structed as  to  cover  the  salient  points  in  the  line.  It 
cannot  always  concentrate  so  well,  as  did  the  pub- 
lishers' representative's  argument,  on  one  or  two  points, 
but  its  main  function  must  be  to  make  a  big  impression 


TRAINING  AND  DEVELOPING  73 

of  the  house  and  the  line  on  the  prospect.  Therefore 
its  preparation  well  can  take  hours  and  hours  of  care- 
ful thought,  study,  comparison,  and  analysis.  It  can 
easily  be  weakened  by  too  much  unimportant  material 
— its  value  can  be  lessened  by  too  much  copy  and  too 
little  illustration — or  it  can  be  spoiled  if  the  man  who 
prepares  it  puts  in  a  lot  of  'big  stuff'  which  is  of  Httle 
or  no  interest  to  the  merchant  in  'Littleton.' 

"This  is  a  very  important  point  to  bear  in  mind  in 
the  preparation  of  a  salesman's  outfit — peculiar  char- 
acteristics of  the  territory  and  the  trade  to  be  called  on. 
If  the  manufactm-er  of  a  nationally  advertised  product 
or  a  wholesaler  is  trying  to  cover  certain  territories 
containing  many  towns  of  say  20,000  and  under,  and 
the  salesman  has  only  one  town  of  over  that  popu- 
lation, it  is  highly  important  to  make  the  portfolio 
apply  specifically  to  communities  of  that  population, 
so  that  the  salesman  will  not  flash  a  testimonial  on  a 
merchant  in  'Littleton'  written  by  a  merchant  in  New 
York  City.  If  he  does,  the  prospect  says:  'Well,  that 
might  work  all  right  in  New  York,  where  your  maga- 
zine advertising  is  big,  but  it  won't  get  across  here.' 
Then  your  salesman  has  to  build  up  a  complete  argu- 
ment against  an  antagonistic  mind.  If  the  portfolio 
is  properly  constructed  the  merchant  in  'Littleton'  sees 
what  merchants  in  similar  communities  are  doing — 
perhaps  he  sees  testimonials  or  store  pictures  from 
dealers  in  nearby  towns  who  are  friends  of  his,  and  this 
fact  lends  greater  weight  to  the  proposition. 

"It  is  well  to  consider  before  preparing  an  outfit  the 
relative  routes  of  different  salesmen  so  that  sectional 
or  geographic  conditions  can  be  taken  into  account  as 
much  as  possible.  In  other  words,  leave  certain 
features  of  the  outfit  flexible. 

"Another  important  point  to  observe  in  the  prepara- 
tion of  an  outfit  is  its  compactness.  It  is  surprising  how 
big  an  outfit  one  man  can  produce,  given  the  material. 


76  BUILDING  UP  A  SALES  FORCE 

and  equally  surprising  how  another  man  can  take  the 
same  material  and  reduce  the  size  and  weight  of  the 
outfit,  and  yet  get  as  good  results.  I  saw  this  worked 
just  recently,  where,  instead  of  handling  all  the  pages 
of  an  album  in  flat  shape  the  pasters  on  each  page  were 
'lapped'  like  the  shiplap  siding  of  a  cypress  house. 
The  portfolio  when  first  prepared  required  one  page 
for  every  two  or  three  pasters,  whereas  in  the  revised 
form  one  of  the  album  pages  would  accommodate  a 
dozen  pasters  in  this  way,  and  they  were  just  as 
effectively  fixed  on  the  page  and  made  a  more  inter- 
esting impression  on  the  prospect.  This  arrangement 
can  be  handled  splendidly  in  showing  testimonial 
letters,  samples  of  cloth,  samples  of  paper,  labels, 
wrappers,  bands,  and  so  forth. 

ALMOST  EVERY  CONCERN  WILL  FIND  HERE  A  VALUABLE 
HINT  TO  HELP  IN  BOpSTING  THE  SALES  VOLUME 

''For  concerns  with  a  line  of  goods  which  can  be 
be  seen,  felt,  tasted,  compared,  weighed,  and  so  on, 
the  actual  goods  in  a  demonstrating  outfit  will  often 
help  mightily,  many  sales  managers  have  found. 

"The  photographic  outfit  has  come  into  considerable 
popularity  and  it  seeriis  particularly  well  adapted  to 
the  selling  of  certain  classes  of  goods. 

"One  manufacturer  I  know,  last  year  equipped  his 
sales  force  with  an  outfit  of  photographic  reproductions 
— about  15  in  number.  These  were  carried  in  a  port- 
folio about  9  by  12  inches  in  size,  and  each  photograph 
illustrated  some  strong  point  of  the  company's  fine. 
The  plan  proved  so  successful  that  the  company 
decided  to  put  out  about  20  large  trunks — exact  enlarge- 
ments of  the  smaller  outfits.  These  were  used  by  the 
salesmen  to  land  special  prospects  in  big  cities." 

"Photographs  have  been  a  big  seUing  help  to  us," 
says  the  sales  manager  of  a  wholesale  dry-goods  house. 
"We  tried  them  first  for  our  fine  of  women's  wear, 


TRAINING  AND  DEVELOPING  77 

children's  dresses,  sweaters  and  knit  goods.  We  photo- 
graphed the  garments  themselves  on  live  models. 
Lively  pictures  catch  the  eye,  and  show  a  customer  the 
fit  and  stj'le  of  a  garment  even  better  than  the  garment 
itself.  These  pictures  we  mount  on  cardboard,  and 
on  the  same  card  we  show  a  small  piece  of  the  material 
used  in  the  garment.  The  salesmen  carry  the  cards  in 
portfolios,  four  of  which  fit  snugly  in  a  trunk  tray. 

''The  same  plan  has  worked  beautifully  with 
women's  and  children's  wear.  Each  salesman  formerly 
carried  one  sample  trunk  of  each  of  these  lines.  Now 
he  carries  in  four  portfolios  sample  cards  of  more 
individual  items  than  he  could  possibly  carry  in  a  full- 
sized  trunk,  if  he  had  to  show  the  actual  garments. 

"Similar  changes  in  showing  samples  helped  sales 
in  other  lines.  Take  knit  underwear,  for  example. 
WTien  we  came  to  replace  the  old-style  bulky  samples 
with  sketches  and  small  pieces  of  the  goods  we  were 
able  to  save  95%  of  the  space  in  a  trunk.  Here  we 
used  sketches  in  place  of  photographs,  in  order  to  show 
the  small  but  important  details — such  as  the  making 
of  the  cufT,  the  collar,  and  the  anklet. 

"In  showing  piece-goods  of  all  kinds — staple  shirt- 
ings, sateens,  tickings,  draperies,  ginghams,  cotton 
dress  goods,  white  goods,  and  so  on — we  made  effective 
changes.  Formerly  they  were  put  up  in  bulky  books, 
an  inch  or  more  in  thickness,  furnished  by  the  mills. 
We  obtained  the  cooperation  of  the  mills  and  had 
samples  mounted  on  our  own  special  sheets  which  were 
bound  in  looseleaf  leather-covered  binders.  The 
samples  themselves  are  smaller  and  so  mounted  that 
space  formerly  used  up  by  hea\'y  cardboard  sheets  is 
now  used  to   show  patterns  and  materials. 

"Our  new  sample  method  means  two  or  three  less 
trunks  for  each  salesman,  and  that  in  turn  means  just 
so  much  less  of  his  time  spent  in  looking  after  trunks 
while  he  is  on  his  trips,  and  in  packing  and  unpacking 


78  BUILDING  UP  A  SALES  FORCE 

them.  I  can  give  you  a  fairly  clear  idea  of  how  much 
trunk  space  and  how  many  actual  garments  we  save 
on  one  of  our  lines  alone — sweaters.  Two  12''xl4" 
portfoUos  carry  samples  of  all  the  sweaters  that  we 
used  to  carry  in  a  large-size  sample  trunk.  We  have 
100  styles  of  sweaters.  If  we  supplied  each  of  our  50 
salesmen  with  a  sample  of  each,  we  would  require  over 
400  dozen  garments.  Packed  in  50  trunks,  this  would 
mean  an  approximate  load  of  5  tons — 200  pounds  for 
each  salesman.  But  the  two  portfohos  together  weigh 
only  20  pounds,  and  fill  but  one-half  of  one  tray.  That 
is  a  real  economy,  as  you  will  agree. 

''Furthermore,  a  salesman  now  can  show  his  samples 
more  easily  and  more  quickly,  because  they  are  more 
compact ;  and  the  customer  need  not  spend  extra  time 
going  over  each  garment  separately.  Samples  are 
kept    in    better   condition  and  need  less  cleaning." 

The  salesmen's  outfits  just  described  also  are  well 
adapted,  investigation  shows,  to  effective  checking  up 
on  how  salesmen  are  taking  care  of  their  samples. 

Frequently,  when  a  sales  meeting  or  convention  is 
held,  the  men  are  asked  to  bring  in  their  outfits  for 
inspection.  In  one  way  or  another  the  sales  managers 
see  that  the  outfits  are  kept  complete  and  in  good 
condition — an  important  point. 

Not  by  any  means  the  least  important  part  of  the 
salesman's  outfit  is  the  price-list;  and  many  concerns 
make  the  mistake  of  trying  to  put  out  an  ''encyclo- 
pedia" instead.  They  try  to  combine  a  catalog,  a 
book,  a  sample  case,  and  the  prices  all  in  one — and 
usually  it  doesn't  work  out  well.  Manufactiu-ers, 
especially  since  changing  price  conditions  have  pre- 
vailed, have  seen  the  value  of  a  condensed  price-refer- 
ence list,  which  can  be  easily  and  quickly  issued,  con- 
veniently referred  to,  and  inexpensively  reprinted  when 
necessary.  Cumbersome  price  books  have  disappeared 
in  many  lines,  much  to  the  delight  of  the  salesmen. 


TRAINING  AND  DEVELOPING  79 

Another  important  part  of  the  salesman's  equip- 
ment, and  one  which  serves  as  a  real  basis  of  instruction, 
is  the  sales  manual.  Investigation  indicates  that  sales 
manuals  are  being  used  more  widely  by  sales  managers 
every  day  to  take  the  place  of  the  old,  stereotyped 
printed  instructions  to  salesmen.  Most  of  these  sales 
manuals  are  made  up  in  looseleaf  form  so  that  new 
material  can  be  added  from  time  to  time. 

HERE'S  A  NOVEL  PLAN  WHICH  EFFECTIVELY  TAKES  THE 
SALES  MANUAL  OUT  OF  THE  "ALMANAC"  CLASS 

One  firm  has  adopted  a  novel  plan  to  keep  the  sales- 
man interested  in  his  manual  and  to  make  it  of  real 
value  to  him.  Each  salesman's  manual  has  his  photo- 
graph embossed  on  it.  In  addition  to  general  selling 
suggestions,  this  manual  gives  specific  information 
about  the  different  lines.  For  instance,  under  "food 
manufacturers"  is  information  to  use  in  selHng  those 
products.  Salesmen,  it  was  found,  get  plenty  of 
opportunity  for  studying  this  condensed  information. 

The  sales  manager  of  a  wholesale  house  selling 
sponges,  pumice,  chamois,  and  the  like,  has  developed 
a  sales  manual  which  is  very  complete  in  the  instruction 
it  gives  his  men.  This  manual  led  to  stronger  co- 
operation of  the  sales  force  and  it  is  considered  so  im- 
portant that  a  new  edition  is  issued  frequently. 

In  describing  his  sales  manual  this  manager  said: 
"Each  manual  is  numbered  and  assigned  to  a  salesman. 
It  is  printed  in  book  form,  with  perforations  near  the 
left  margin,  in  order  that  it  may  fit  into  a  leather, 
stapled  binder  that  is  a  part  of  each  salesman's  equip- 
ment. Every  man  in  the  organization  is  encouraged 
to  send  in  suggestions  for  improving  the  manual,  and 
so  rapidly  has  it  been  growing,  that  we  already  have 
pubhshed  10  editions.  With  its  printed  instructions 
before  him,  no  salesman  can  plead  as  an  excuse,  *I  was 
never  told  how  to  do  this  or  that.' 


80  BUILDING  UP  A  SALES  FORCE 

"Perhaps  the  most  effective  way  to  illustrate  some  of 
the  standards  that  we  have  worked  out  is  to  quote  from 
the  manual.  One  of  the  points  of  general  interest 
deals  with  the  salesmen's  expense  accounts: 

Laundry,  barber  work,  cigars,  and  other  personal  items  of  ex- 
pense are  not  allowed. 

We  are  not  to  be  put  to  extra  expense  for  compartment  cars  for 
night  travel,  or  parlor  cars  for  day  travel. 

Note  in  your  expense  book  the  city  you  are  in  when  expense  is 
incurred— also  the  date.  If  you  are  living  on  the  European  plan, 
itemize  all  incidentals  and  also  each  meal — breakfast,  dinner,  and 
supper. 

Salesmen  will  prepay  all  telegrams  to  save  bookkeeping. 

Write  down  the  name  of  the  town  on  the  top  of  each  page  in 
your  expense  book,  and  put  your  name  on  the  outside  of  the  book. 

Salesmen  generally  are  advanced  $50  for  expenses.  With  this 
he  should,  when  advisable,  buy  the  proper  size  of  mileage  book 
and  charge  only  the  mileage  daily  as  used. 

Every  Saturday  night  you  will  send  in  your  expense  book  for 
the  week  ending  that  night  and  draw  a  draft  on  us  for  the  exact 
amount  of  your  expense  at  the  same  time.  In  this  way  the  expense 
books  will  get  to  the  office  on  Monday  morning  and  the  drafts 
will  arrive  about  the  same  time. 

Drafts  must  be  drawn  only  for  the  amount  that  the  salesman 
spends  during  that  week.    This  rule  must  be  strictly  adhered  to. 

"The  careful  study  of  our  own  selling  methods  which 
the  preparation  of  this  manual  entailed,  led  to  a  study 
of  the  'other  fellow's'  methods  as  well.  How  did 
notably  successful  sales  organizations,  for  example, 
straighten  out  the  kinks  in  their  problems  that  were 
similar  to  ours?  How  did  the  men  who  sold  adding 
machines,  or  typewriters,  or  varnishes,  solve  the  prob- 
lem of  carrying  samples?  Out  of  inquiries  like  these 
grew  a  set  of  rules  that  now  govern  our  salesmen's 
use  of  samples  and  equipment — which  should  consist, 
to  quote  again,  of  the  following: 

First:    A  small  price  book,  which  we  provide. 
Second:    A  fountain  pen  with  which  to  make  notations  on  our 
sales  cards  (5  by  8  inches),  which  you  provide. 


TRAINING  AND  DEVELOPING  81 

Third:  A  pocket  magnifj'ing  glass  with  which  to  examine 
powdered  pumice  stone,  rouge,  emery,  and  other  products. 

Fourth :  A  pocket  knife  (and  have  it  sharp)  and  a  pocket  tape 
measure  (36  inches)  to  measure  chamois  skins  and  felt — a  steel  one 
preferred. 

These  you  must  have  each  morning  before  you  start  out,  in  order 
not  to  be  caught  at  a  disadvantage. 

Salesmen  are  provided  with  black-seal  leather  document  cases 
in  which  to  carry  samples  of  merchandise. 

You  should  carry  samples  of  each  of  our  standard  lines. 

It  is  of  immense  value  to  show  the  goods  we  are  talking  of. 
If  the  buyer  not  only  hears  you  talk  of  sponges,  but  sees,  feels, 
smells,  and  weighs  sponges,  you  make  it  easy  to  get  his  favorable 
attention,  and  then  desire.  Apple  pie  on  the  sideboard— you  see 
its  brown  crust,  you  smell  its  delicious  odor,  you  catch  a  glimpse 
of  the  browned  apples— it  is  more  desirable  than  "apple  pie" 
printed  on  a  bill  of  fare. 

''Hand  in  hand  with  this  standard  equipment  goes 
the  standard  demonstration  of  our  goods  to  a  pros- 
pect. The  several  methods  of  approach,  the  plan  of 
exhibiting  samples,  and  even  the  specific  forms  of 
address,  have  all  been  tabulated.  To  the  manufac- 
turer who  is  famihar  with  these  standardized  forms  of 
arguments  and  'answers  to  objections,'  the  manual  is 
not  unusual.  But  from  our  experience  we  have  culled 
a  few  ideas  that  have  worked  out  so  well  in  practice 
that  they  may  be  worth  recording.  For  example,  here 
is  a  bit  of  manual  instruction  that  involves  policy: 

Carbon  copies  of  house  letters  to  his  customers  are  seiit  to  the 
salesman  in  order  to  keep  him  in  daily  touch  with  the  situation. 
It  is  not  expected  that  you  are  to  keep  these  letters,  but  only  such 
letters  as  will  lead  to  business  building,  letters  on  subjects  you 
desire  to  take  up  with  customers  on  your  next  call.  These  inchide 
adjustment  of  complaints,  and  collections. 

These  carbons  should  be  filed  in  envelops  or,  better  still,  a  flat 
letter  file,  under  the  name  of  the  different  towns  which  you  make. 
Then,  when  you  come  to  a  town,  pull  out  the  correspondence  for 
it,  and  you  can  go  into  the  subjects  in  question  more  intelligently, 
and  your  customer  will  be  pleased  by  the  personal  interest  you  have 
taken  in  his  business. 


82  BUILDING  UP  A  SALES  FORCE 

If  you  can  go  into  his  office  with  a  carbon  copy  of  a  letter  which 
has  been  written  him  and  demonstrate  that  you  are  thoroughly 
in  touch  with  the  correspondence,  you  are  really  BUILDING 
BUSINESS. 

Then,  if  you  desire  to  write  us  about  any  particular  subject,  we 
prefer  that  you  write  on  the  back  of  the  carbon  copy  sent  you. 
It  saves  looking  up  back  correspondence. 

"Throughout  the  manual,  too,  are  scattered  bits  of 
advice  on  what  may  appear  to  be  points  of  small 
importance,  but  which  experience  has  shown  to  have 
dkect  bearing  upon  sales.    For  example: 

You  should  be  calling  on  your  first  man  at  8  o'clock  in  the  morn- 
ing, not  9  o'clock.  One  of  our  president's  characteristic  plans  was 
to  go  to  the  farthest  factory  and  be  there  at  8  o'clock — and  he 
won  the  admiration  of  the  buyers. 

''I  found  the  methods  of  our  most  successful  sales- 
men worth  observance  by  our  entire  force.  So  the 
following  instruction  appears  in  the  sales  manual : 

Mention  the  principal  article  you  are  selling  to  the  customer 
every  time  you  call  on  him.  Say,  "I  am  King,  the  sponge  man," 
or  "I  am  King,  the  pumice  man,"  as  the  article  may  be.  This, 
often  repeated  makes  such  an  impression  that  when  the  buyer 
thinks  of  pumice,  he  thinks  of  King. 

"If  the  prospective  customer  is  not  acquainted  with 
either  the  salesman  or  the  company,  the  following  bit 
of  advice  apphes  to  his  work : 

When  you  walk  into  a  man's  office,  don't  lay  out  your  card 
and  say:  "I  am  Mr.  King,  representing  Adams  &  Company  of 
New  York  and  Chicago."  You  should  not  say  this  for  the  follow- 
ing reasons: 

First:  The  buyer  may  not  know  Adams  &  Company,  and 
probably  he  does  not  particularly  care  to.  Therefore,  the  mention 
of  our  name  does  not  arouse  interest. 

Second:  It  is  a  time-worn  phrase  that  every  buyer  hears 
probably  every  10  minutes  of  the  day — and  you  know  how  repeti- 
tion grates  on  the  nerves.  It  certainly  does  not  incite  a  feeling  of 
welcome. 

Therefore,  before  you  walk  into  a  man's  office,  plan  what  you 
will  sell  that  man.    Even  though  he  may  use  four  of  five  of  our 


TRAINING  AND  DEVELOPING  85 

articles,  get  your  opening  talk  started  on  one  certain  item  that  you 
are  going  to  sell,  and  stick  to  that  item  at  the  start. 

The  sales  manual  has  been  an  institution  in  this 
company  for  six  years,  and  it  has  been  revised  and 
enlarged  with  each  edition  until  now  it  is  a  text-book 
of  information  that  every  member  of  the  force  is  glad 
to  get — and  one  to  which  each  is  expected  to  con- 
tribute. And  that  it  has  been  of  practical  value  is 
indicated  by  the  fact  that  a  staff  of  15  salesmen, 
handhng  a  closely  competitive  line  in  which  the 
individual  sale  is  usuajly  not  large,  is  selhng  $1,000,000 
worth  of  goods  a  year  on  the  average. 

One  clothing  concern  not  only  suppUes  its  salesmen 
with  sales  manuals  but  it  also  furnishes  each  season 
a  neatly  printed  book  of  pocket  size,  bound  in  stiff 
covers,  which  gives  a  detailed  account  of  each  model 
the  house  is  offering  for  the  season. 

These  books  are  printed  on  heavy  paper  and  are 
illustrated  with  drawings  of  the  different  styles.  This 
helps  salesmen  to  pick  out  the  principal  sales  arguments 
quickly  and  easily,  and  also  makes  a  good  impression 
on  the  dealer,  it  is  found. 

This  brings  us  to  the  point  where  our  salesman  has 
received  his  preliminary  training,  and  has  been  properly 
equipped  to  carry  on  his  work.  The  next  problem  we 
face  is  how  to  keep  up  this  training,  and  maintain  our 
man's  interest.  Obviously,  the  best  way  to  do  this  is 
by  letter,  since  he  is  away  on  the  road. 

There  are  two  general  types  of  letters  to  salesmen, 
investigation  indicates.  One  is  the  quiet,  helpful  type, 
full  of  valuable  selling  points  and  general  advice.  The 
other  type  is  the  ''hurrah  boys"  ginger-up  letter.  It 
was  found  that  many  sales  managers  believe  that 
stereotyped  "enthusiasm  letters"  sent  broadcast  to  a 
lot  of  salesmen,  like  a  talk  delivered  at  random  to  a 
mixed  crowd,  are  not  so  helpful  as  the  word  in  time  to 
the  man  who  needs  it. 


86  BUILDING  UP  A  SALES  FORCE 

One  sales  manager  said  when  interviewed:  "Let's 
take  a  look  at  one  of  these  enthusiasm  men.  There  he 
sits,  behind  his  big  flat-topped  desk,  dictating  one  of 
his  ginger-up  letters.  The  letter  sparkles.  It  effervesces 
with  enthusiasm.  '  Send  a  copy  of  that  to  every  sales- 
man— and  get  it  off  this  afternoon/  he  concludes. 

"Let's  look  into  100  hotel  lobbies  the  next  morning. 
In  these  lobbies — each  one  different,  yet  monotonously 
ahke — sit  100  different  types  of  salesmen,  salesmen  who 
had  100  different  kinds  of  yesterdays,  100  different 
kinds  of  last  nights,  100  different  kinds  of  breakfasts; 
yet,  behold,  each  last  one  of  them  gets  the  same  kind 
of  a  ginger-up  talk  in  the  morning  mail. 

WHY  "GINGER"  LETTERS  WHICH  DON'T  GINGER  OFTEN  ARE 
MORE  DETRIMENTAL  THAN  HELPFUL  TO  SALESMEN 

"Who,  do  yo!!u  suppose,  gets  any  appreciable  measure 
of  enthusiasm  out  of  that  letter?  Perhaps  the  sales 
manager  is  the  only  one  who  benefits." 

It  is  just  as  poor  a  plan,  however,  according  to 
investigation,  for  the  sales  manager  to  send  out  a 
letter  which  will  tend  to  discourage  his  men  and  make 
them  feel  that  their  hard  work  is  not  appreciated. 

Recently,  for  instance,  a  salesman  for  a  roofing  and 
building  material  concern  concluded  a  contract  for 
the  roofing  and  building  insulation  material  on  a  $100,- 
000  hotel.  He  worked  six  days  at  high  tension  to  land 
the  contract.  The  order  ran  into  several  thousand 
dollars,  and  he  could  not  help  feeling  that  he  had 
accomplished  a  good  week's  work. 

He  did  not  get  the  order  until  midnight  of  the  final 
day.  The  contractor  and  his  chief  engineer  had  been 
checking  over  the  specifications  with  him  in  his  room 
at  the  hotel,  and  when  he  finally  got  the  contractor's 
signature  on  the  dotted  line  he  was  dead  tired.  Still, 
he  was  elated  with  his  success,  and  accompanied  his 
customers  to  the  hotel  office  before  "turning  in." 


IRAlNi^G  AND  Di:.VELUr;:\C;  87 

The  night  clerk  called  him  to  the  desk  and  handed 
him  a  letter.  He  hurried  into  the  writing  room  and 
before  opening  it  wrote  out  his  biggest  order. 

This  letter  the  clerk  had  given  him  was  from  his 
house.  It  was  a  letter  that  a  sales  manager's  corre- 
spondent had  written  and  it  contained  a  lot  of  strong- 
arm  "pep" — just  what  an  inexperienced  man  sitting 
in  a  swivel  chair  supposed  the  men  on  the  road  needed 
to  "wake  'em  up."  It  is  not  necessary  to  quote  the 
entire  letter.    This  is  the  way  it  began: 

Do  you  think  you  are  doing  the  best  you 
can?    Is  it  possible  for  you  to  say  honestly 
that  you  are  giving  the  line  at   least  eight 
hours  of  conscientious  effort  six  days  in  the 
week?     In  other  words,   are  you  delivering  all 
the  service  you  are  paid  for? 

The  salesman  read  the  letter  twice.  The  elation  of 
work  well  done  began  to  leave  him,  and  anger  at  the 
man  in  the  swivel  chair  back  in  the  home  office  to 
replace  it.  He  turned  the  letter  over  and  wrote  the 
following  note  on  the  back: 

Enclosed  please  find  order.     Replying  to 
your  letter  herewith  —  no.     I  do  not  think  I 
am  doing  the  best  I  can.     I  am  sure  that  I  can 
do  a  blamed  sight  better  with  another  house. 
Accept  this  as  my  resignation,    effective  in 
60  days  in  accordance  with  my  contract. 

The  resignation  was  not  accepted.  The  salesman 
received  a  prompt  explanation  that  a  copy  of  the  letter 
he  had  received  had  been  sent  to  every  salesman  on 
the  road.  Needless  to  say  steps  were  taken  to  see  that 
this  particular  mistake  was  not  repeated,  but  the  dam- 
age took  a  lot  of  expensive  corrective  work. 

"Salesmen  and  their  ways  must  be  understood  if 
the  greatest  measure  of  profitable  cooperation  is  to 
be  secured,"  says  one  experienced  sales  manager. 
"Letters  written  from  their  own  viewpoint,  in  a  spirit 


88  BUILDING  UP  A  SALES  FORCE 

of  fellowship,  by  one  who  has  experienced  the  same 
problems  they  run  up  against,  seldom  fail  to  get  a 
satisfactory  respronse  from  most  salesmen. 

"The  other  type  of  letters  may  cost  heavily.  It  is 
usually  an  unprofitable  hazard  to  run  the  shghtest 
risk  of  replacing  the  enthusiasm,  cheerfulness,  and 
determination  in  a  salesman's  mind  with  resentment, 
discouragement  and  all-around  gloom." 

A  salesman  who  has  traveled  through  the  Southwest 
for  18  years  for  a  St.  Louis  shoe  house  not  long  ago 
expressed  his  ideafe  on  this  subject — and  he  had  positive 
ideas.  He  drew  an  old  letter  from  his  wallet.  It  was 
worn,  faded,  torn,  and  patched  in  the  creases,  and  it 
carried  a  date  going  back  about  10  years.  It  was  a 
letter  from  the  former  president  of  his  firm. 

"Whenever  I  get  a  bit  discouraged,"  he  remarked, 
"I  dig  up  this  letter  and  read  it.  When  the  writer  died, 
a  couple  of  years  ago,  I  lost  a  real  friend,  one  who  had 
helped  me  over  a  lot  of  rough  places." 

Then  he  skimmed  through  the  three  pages  of  the 
letter,  indicating  occasional  paragraphs  that  he  par- 
ticularly liked.     Here  are  some  of  them: 

A  statement  of  the  month's  sales  reached 
my  desk  this  morning,   and  I  very  much  regret 
to  see  that  conditions  in  your  territory  pre- 
vented your  landing  a  volume  equal  to,   or 
surpassing,   your  last  year's  business  for  the 
same  month.    However,   I  want  you  to  know,   Mr. 
Landis,    that  here  in  the  office  we  are  confi- 
dent that  your  season's  business  will  sur- 
prise you  and  better  the  record  you  made  last 
year. 

It  is  not  the  month's  nor  the  season's 
volume,   nor  even  the  year's  volume,    that  we 
judge  a  salesman  by.     It  is  his  years  of  ser- 
vice with  this  firm.     And  judging  your  work  by 
results,   we  want  you  to  know  that  we  are  sure 
we  haven't  a  salesman  who  could  do  any  better 
than  you  are  doing  right  now.    We  are  con- 


TRAINING  AND  DEVELOPING  8!) 

vinced,  too,  that  our  force  of  salesmen  is 
not  surpassed  by  any  in  the  world. 

Don't  get  discouraged  for  a  moment!  The 
writer  remembers  very  well  a  season  much  like 
this  one,  back  in  1896.  As  you  probably  know, 
he  was  traveling  then,  and  his  sales  fell  off 
to  a  very  disheartening  extent.  Not  only  the 
season  but  the  entire  year  showed  a  loss  of 
business. 

Well,  I  came  in  with  all  the  starch  taken 
out  of  me.  I'm  ashamed  of  myself  now,  when  I 
think  of  the  demoralized  state  of  mind  I  was 
in.  However,  before  going  out  again,  I 
bolstered  myself  up,  got  back  a  little  confi- 
dence in  myself,  and  do  you  know,  the  very 
next  year  was  the  most  successful  year  in  all 
my  experience.  Judged  by  all  the  years  of  my 
service,  the  house  must  have  thought  pretty 
well  of  me,  for  they  took  me  into  the  firm. 

So  don't  worry  a  moment  over  the  way 
things  seem  to  be  going.  You  had  nothing  to 
do  with  the  lack  of  rain  and  other  conditions 
that  hamper  your  work.  If  the  season,  or  even 
the  year,  shows  a  loss  in  sales  for  you,  we 
have  absolute  faith  in  your  ability  to  make  it 
up  and  more  as  soon  as  conditions  are  normal. 

"I  made  it  up  all  right,"  declared  the  salesman, 
as  he  carefully  replaced  the  letter. 

Another  essential  for  an  effective  salesman  is  confi- 
dence in  himself  and  in  his  line,  and  the  knowledge 
that  his  house  has  full  confidence  in  him. 

The  president  of  a  wholesale  corporation  employing 
over  150  salesmen  understands  this,  and  because  he 
does  understand  it,  he  has  improved  the  selling  service 
of  his  concern  to  a  remarkable  degree. 

"For  a  long  time,"  he  said,  *'I  had  been  considering 
ways  to  put  every  one  of  our  salesmen  in  a  good  humor 
every  day.  About  10  months  ago  I  decided  to  try 
a  new  idea  for  a  month.  It  proved  effective  and  we 
have  used  it  ever  since,  you  may  be  sure. 


90  BUILDING  UP  A  SALES  FORCE 

"It  is  very  simple.  I  give  it  my  personal  attention 
because  I  enjoy  it,  and  because  it  keeps  me  in  close 
touch  with  the  men  on  the  road. 

"I  make  it  my  first  duty  every  morning  to  dictate  a 
brief,  cheerful  circular  letter,  to  be  mailed  to  the  sales- 
men in  the  afternoon.  These  letters  have  but  little 
direct  reference  to  the  business.  I  try  to  make  them 
interesting,  amusing,  and  always  optimistic.  In  every 
one  I  aim  to  put  a  grain  of  common-sense  philosophy. 

"The  letters  have  been  successful — mainly,  I  think, 
because  we  have  been  systematic  in  issuing  them.  The 
good  effect  has  been  cumulative  " 

The  extent  to  which  these  letters  are  appreciated 
by  the  salesmen  was  strikingly  shown  last  spring, 
when  the  president  took  a  week's  vacation  and  failed 
to  notify  the  men  that  the  letters  would  stop. 

"When  I  returned,"  he  says,  "there  were  over 
100  letters  from  men  who  had  kicked  because  we  had 
discontinued  the  daily  letters. " 

It  is,  of  course,  his  systematic  knowledge  of  his 
men  and  their  problems  that  has  enabled  this  man  to 
succeed  with  circular  letters  where  others  fail. 

Many  of  the  salesmen  for  this  concern  take  enough 
interest  in  the  letters  to  send  in  good  ideas  and  stories 
for  use  in  connection  with  them. 

Here  is  a  typical  letter  from  this  series.  The  idea 
for  it — like  many  others — came  from  an  incident  in 
the  president's  day  at  the  office. 

An  old  friend  came  to  see  me  recently,   and 
we  talked  over  a  number  of  things  and  then 
somehow  got  on  the  subject  of  hotels. 

"There's  a  house  down  in  Louisville,"  he 
said,    "where  I'd  rather  stop  than  in  any 
other  hotel." 

"Why?"  I  asked, 

"Well,  it's  a  good  hotel  and  they  put  you 
in  a  good  humor  the  minute  you're  out  of  bed 


TRAINING  AND  DEVELOPING  91 

in  the  morning.  In  all  my  life  I've  never 
heard  a  sweeter  voice  or  a  more  cheerful  call 
than  the  girl  at  the  house  'phone  uses  to 
wake  guests  up  in  the  morning. 

"Of  course,  when  the  'phone  in  your  room 
rings  the  first  time,  you  just  turn  over  and 
try  to  forget  it.  Then  it  rings  again  and  you 
get  up  a  little  provoked,  with  your  head  per- 
haps a  bit  groggy  from  the  lack  of  the  extra 
sleep  you  wanted.  You're  in  a  bad  humor  gen- 
erally and  the  bad  humor  sometimes  lasts  until 
after  breakfast  or  into  the  middle  of  the  day. 

"It  does,  I  guess,  when  you  are  stopping  at 
most  hotels. 

"But  in  that  hotel  it's  different. 

"'Good  morning,  sir,"  drifts  through  the 
receiver,  softly  and  pleasantly.  'Sorry  to 
disturb  your  sleep;  but  it's  7  o'clock. 
That's  the  call  you  left.  Time  to  get  up!' 

"Somehow  or  other  you  usually  can't  help 
smiling  while  you  shave.  And  your  mind  is  as 
likely  as  not  filled  with  thoughts  that  do 
you  good.  You  recall,  perhaps,  how  you  hated 
to  get  up  and  go  to  school  when  you  were  a 
kid.  Gee!  How  good  the  covers  felt  on  cold 
mornings. 

"'Get  up,  Bobby,  dear!'  —  you  remember 
how  your  mother  used  to  sing  it  up  the  stair- 
way —  'It's  almost  time  to  start  to  school, 
and  breakfast's  ready.  Time  to  get  up,  son!' 

"They  make  a  fellow  feel  at  home." 

Since  my  friend  left  I've  thought  a  good 
deal  about  his  experience.  That  hotel  is 
creating  business  by  making  hundreds  want  to 
return  to  it  just  because  of  the  cheerful, 
sincere  efforts  of  a  young  woman  who  is  hid- 
den away  somewhere  behind  an  office  partition. 

In  our  business  we've  got  the  advantage 
over  this  young  woman.  We  come  face  to  face 
with  our  customers.  It's  well  worth  thinking 
about  —  don't  you  think  so? 


92  BUILDING  UP  A  SALES  FORCE 

"To  what  extent  these  letters  have  been  the  actual 
means  of  increasing  sales,"  says  the  president,  "we 
do  not  know,  of  course.  But  we  are  convinced  they 
have  paid  handsomely.  We  are  certain  their  value  is 
vastly  above  their  small  cost  in  money  and  time." 

This  executive  spent  something  like  15  years  on  the 
road  as  a  salesman.  He  won  his  own  success  by  hard 
work  and  ability.  His  campaign  of  cheerful  letters 
has  produced  results  because  he  always  remembers 
his  own  experience.  His  letters  appeal — they  are 
genuine  all  the  way  through. 

HERE'S  A  TESTED  PLAN  WHICH  OUGHT  TO  BRING  RESULTS 
FOR  CONCERNS  OF  MANY  SIZES  AND  LINES 

A  manager,  who  is  responsible  for  results  from  a  much 
smaller  sales  force,  uses  a  different  method. 

"Almost  every  week,"  he  says,  "I  send  to  each  of 
our  32  salesmen  some  article,  book  or  booklet,  on  some 
phase  of  his  everyday  work. 

"When  I  started  this  practice,  two  years  ago,  let- 
ters from  several  of  the  men  showed  plainly  that  they 
resented  my  apparent  attempt  to  teach  them  some- 
thing about  selling.  However,  when  I  frankly  ex- 
plained that  my  effort  was  only  to  supply  them  with 
good  ideas  that  would  help  them  to  sell  more  goods, 
this  resentment  disappeared  almost  at  once. 

"I  explained  that  our  advertising  department  was 
always  hungry  for  new  ideas,  and  that  I  thought  good 
ideas  should  be  just  as  valuable,  and  acceptable,  to 
a  salesman  as  they  are  to  an  advertising  man. 

"Frequently  I  find  excellent  articles  in  magazines 
and  newspapers.  Usually,  with  magazines,  I  mark 
the  copies  and  forward  them  to  the  men  with  a  letter 
under  another  cover.  The  items  in  newspapers  I 
merely  clip,  and  enclose  with  letters. 

"On  one  day  I  ran  across  a  story  that  brought  in  a 
lot  of  replies.     It  was  a  brief  newspaper  story   of 


TRAINING  AND  DEVELOPING  93 

the  capture  and  release  of  an  American  woman  by  Mexi- 
can bandits.  The  climax  of  this  story  was  the  tribute 
paid  to  the  woman  by  another  captive,  Spencer  by 
name,  who  had  been  a  ranch  manager.  I  marked  this 
part  of  the  article  to  go  to  the  men: 

"She  was  the  gamest  woman  I  ever  saw,"  Spencer  said.  "If  she 
had  sniffed  and  cried  the  Mexicans  would  have  killed  her.  She 
smiled  in  the  faces  of  her  captors.  They  cursed  her  and  threatened 
her  with  death,  but  she  kept  on  smiling.  The  bandits  did  not  mis- 
treat her.   They  let  her  go,  a  tribute  to  her  absolute  fearlessness." 

"In  the  letter  that  went  with  this,  I  suggested  the 
power  of  a  smile.  If  it  could  make  a  lot  of  ignorant 
bandits  spare  a  woman's  life,  I  reasoned,  it  certainly 
ought  to  work  wonders  with  buyers. 

"Perhaps  you  will  say  that  this  was  off  the  track 
when  it  comes  to  seUing  goods.  But  it  happened  to 
be  timely  and  the  men  Uked  it.  I  find  that  it  is 
human-interest  articles,  stories  of  actual  successes, 
and  accounts  of  how  others  have  overcome  obstacles, 
that  arouse  interest  in  salesmen." 

Another  sales  manager,  whose  salesmen  sell  nearly 
S2,000,000  in  goods  annually,  follows  a  plan  that  he  has 
found  unusually  successful  from  the  start. 

"When  I  took  this  position,"  he  said,  "I  found  that 
four  departments  all  were  in  the  habit  of  instructing 
the  salesmen.  The  office  manager  handled  all  corre- 
spondence with  reference  to  commissions  and  expense 
accounts.  If  the  salesman's  shipping  instructions 
were  vague  or  incorrect  on  an  order,  the  head  of  the 
order  department  promptly  would  write  him  a  sar- 
castic letter.  Neither  of  these  men  had  ever  sold  a 
bill  of  goods  in  his  hfe — nor  ever  expected  to. 

"Frequently,  too,  the  secretary  would  write  an 
abrupt,  dictatorial  letter  on  how  the  firm  wanted  its 
goods  sold.  Often  his  instructions  could  not  be  fol- 
lowed, no  matter  how  the  men  tried,  because  of  con- 
ditions about  which  the  secretary  knew  nothing. 


94  BUILDING  UP  A  SALES  FORCE 

"Running  through  a  week's  correspondence  from 
the  salesmen,  I  failed  to  find  a  single  letter  that  did 
not  express  some  degree  of  resentment,  discourage- 
ment, indifference,  or  all  three  in  one. 

"The  first  rule  I  made,  therefore,  was  that  all  corre- 
spondence with  salesmen  must  cross  my  desk.  The 
abrupt,  sarcastic,  dictatorial  letters,  I  rewrote,  and 
mailed  over  my  own  signature.  And  I  have  been  very 
careful  ever  since  that  not  a  single  offensive  hne  leaves 
the  office  under  any  circumstances. 

"There  was  a  gratifying  response  to  my  censorship. 
The  tone  of  the  mail  from  the  men  changed  within  a 
week  or  two  and  stayed  changed. 

"Now,  when  it  is  necessary  to  check  a  man  up  for 
any  reason,  we  call  him  into  the  office.  We  do  not 
run  the  risk  of  having  letters  misunderstood.  We  call 
in  the  man  and  go  to  the  *mat'  with  him  at  home. 

"And  he  does  not  go  out  again  until  he  is  satisfied 
that  our  position  is  just,  and  until  we,  in  turn,  are  con- 
fident that  the  fault  has  been  overcome.  We  do  not 
consider  it  fair  to  our  lines,  or  to  the  salesman,  to  have 
him  calHng  on  our  customers  with  resentment  in  his 
heart.  A  discouraged,  disgruntled  salesman  may  be 
able  to  take  a  few  orders,  but  he  cannot  represent  us. 

"If  our  salesmen  are  always  cheerful,  optimistic, 
and  encouraging,  we  are  sure  that  our  customers  will 
be  glad  to  have  them  call.  So  we  do  everything  we  can 
to  foster  such  an  attitude  in  them. 

"One  of  the  best  men  on  the  sales  force  resigned  a 
day  or  two  after  I  accepted  my  position.  I  went  over 
his  correspondence  and  found  that  the  trouble  was 
evidently  due  to  a  personal  dislike  for  him  on  the  part 
of  my  predecessor.  The  man  had  secured  some  ex- 
cellent business,  and  opened  several  desirable  accounts 
during  his  eight  months'  service  with  the  firm. 

"I  wrote  him  frankly  that  I  had  read  many  of  his 
letters,  that  I  did  not  blame  him  for  the  stand  he  had 


TRAINING  AND  DEVELOPING  95 

taken,  and  that,  in  my  opinion,  the  evidence  showed 
plainly  he  had  not  been  treated  fairly.  I  told  him  I 
regretted  that  the  firm  had  lost  his  services  because  I 
judged  him  to  be,  from  his  letters  and  from  what  I  had 
heard  of  him,  the  type  of  man  we  needed. 

"He  replied  with  a  fine,  manly  letter,  regretting  his 
decision  to  quit  and  expressing  vexation  at  having 
already  made  arrangements  to  go  with  another  house. 
He  said  that  the  conditions  imposed  on  him  by  our 
office  had  grown  unbearable,  but  since  receiving  my 
letter  he  was  leaving  as  a  friend  and  would  do  us  a 
good  turn  every  chance  he  got  in. 

"I  wrote  him  several  times,  wishing  him  success  with 
his  new  line  and  offering  to  assist  him  in  any  way  I 
could.  His  replies  were  prompt  and  courteous  without 
a  single  exception  at  any  time. 

"He  did  not  go  with  one  of  our  competitors,  and 
about  30  days  after  he  quit  he  took  the  trouble,  on 
his  own  initiative,  to  entertain  a  buyer  whom  he  knew 
and  sell  him  for  us.  This  buyer  came  to  the  factory 
with  a  note  of  introduction  to  me  from  this  former 
salesman  and  bought  a  handsome  opening  bill  that 
netted  an  attractive  profit." 

These  are  the  results  of  some  letters  designed 
especially  to  boost  sales.  Another  sales  manager  took 
special  pains  to  point  out  in  a  letter  the  value  that 
the  salesman  could  be  to  the  house  in  watching  care- 
fully the  credit  of  his  customers. 

This  manager  pointed  out  that  more  than  S  1,000,- 
000  worth  of  goods  had  been  shipped  out  in  a  compar- 
atively short  time.  He  showed  the  salesman  that  the 
possibihty  of  getting  proper  returns  on  this  amount 
rested  on  the  salesmen's  judgment  on  the  customer's 
ability  and  willingness  to  pay. 

He  mentioned  some  recent  losses  the  company  had 
incurred  on  bad  debts,  and  urged  the  salesmen  not  to 
make  friendship  the  entire  basis  of  credit.  He  also  gave 


96  BUILDING  UP  A  SALES  FORCE 

a  few  helpful  hints  on  how  to  make  sure  the  customer's 
credit  was  good  for  his  purchases. 

The  credit  question  also  was  the  burden  of  a  series 
of  letters  sent  out  by  another  manager.  He  told  his 
salesmen  that  it  was  ''as  bad  to  miss  a  collection  as  to 
miss  a  train,"  and  that  ''the  salesman  who  could  not 
collect  money  was  as  poor  as  one  who  could  not  sell." 

He  urged  the  men  to  go  after  collections  hard,  and 
offered  a  substantial  prize  to  the  man  who  could  show 
the  cleanest  account  at  the  end  of  the  year.  This  poUcy 
wiped  out  most  of  the  company's  "dead"  accounts. 

And  so,  we  see  that  the  old  days  of  hiring  a  salesman 
one  minute,  giving  him  a  sample  case  the  next,  and 
"shooting"  him  out  on  the  road  in  the  next,  minus  all 
instructions  except  those  to  get  orders,  have  passed 
for  all  time  with  progressive  concerns. 

Manufacturers  and  wholesalers  see  clearly  the  im- 
portance of  thoroughly  equipping  their  men  for  the 
big  sales  battle.  They  realize  the  need  for  keeping 
their  men  informed  on  sales  questions  and  tactics,  and 
of  instilling  into  them  the  confidence  and  knowledge 
which  brings  orders.  With  methods  like  those  described 
in  this  section  they  have  developed  their  sales  forces 
to  high  effectiveness,  trained  their  men  to  cultivate 
territories  more  intensively,  and  thus  reduced  the  cost 
of  selling  to  an  appreciable  and  appreciated  degree. 


TOURING  the  Great  War  business  men  all  over 
"^  the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbolize  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  Publica- 
tions are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  Imew 
90  well  during  the  war. 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
ofthmlLW.  SHAW  COMPANY 


SECTION  9 
Graphs  that  Check  Up  on  Sale$ 


GRAPHS  THAT  CHECK  UP  ON  SALES 

WHEN  the  general  manager  of  an  eastern  com- 
pany found  it  necessary  to  be  absent  on  business 
in  San  Francisco  for  nearly  three  months,  he 
selected  from  the  reports  which  came  to  his  desk  those 
which  he  wanted  forwarded  to  him  to  help  him  keep 
in  touch  with  the  business.  His  statistical  department 
listed  these  reports  and  found  that  they  numbered 
exactly  110,  even  after  careful  investigation,  which 
eliminated  several  as  valueless. 

The  company's  statistician  doubted  if  the  executive 
could  find  time  to  go  over  all  these  reports.  So  he  set 
about  figuring  out  how  they  could  be  condensed.  When 
his  experirnents  were  finished  he  had  the  110  reports 
combined  into  12  graphs  or  charts.  These  graphs  gave 
a  complete  survey  of  the  information  in  the  records — 
and  gave  it  in  one  tenth  of  the  time. 

This  experience  illustrates  the  practical  usefulness 
to  which  graphs  can  be  put  in  almost  any  type  of 
business.  In  practically  every  instance  where  com- 
parisons are  desired  they  bring  out  the  important  points 
more  vividly  than  mere  figures  can.  They  keep  facts 
from  losing  themselves.  Also,  by  showing  tendencies 
at  a  glance^  they  save  the  time  of  wise  executives  who 
desire  to  make  use  of  past  performances  when  planning 
for  future  business. 

Investigation  revealed  that  the  following  two  classes 
of  information  can  effectively  be  shown  graphically 
or  on  maps  to  advantage  all  around: 

36 

Copyright,  1921,  by 

by  A.  W.  SHAW  COMPANY 

as  a  part  of  the  Shaw  Selling  Series 


HOW  GRAPHS  CAN  HELP  37 

I.    Sales  data 

a     Graph  of 

1.  Sales 

2.  Salesmen's  comparative  records 

3.  Relation  of  sales  to  expense 

4.  Relation  of  sales  to  advertising 
b     Maps  showing 

1.  Distribution 

2.  Routes 

3.  Sales  by  territories 

4.  Prospects  by  territories 

IL    Advertising  data 
a     Graphs  of 

1.  Advertising  expenditures 

2.  Results  of  direct  mail  campaigns 

3.  Follow-up  mailings 

4.  Percentage  of  replies 
b     Maps  showing 

1.  Distribution  of  advertising 

2.  Population  reached 

In  considering  the  records  kept  graphically  by  suc- 
cessful manufacturers  and  wholesalers  let  us  consider 
also  the  best  methods  that  have  been  found  of  making 
these  charts  and  maps  inexpensively. 

The  success  which  the  sales  manager  of  a  small 
company  in  the  West  has  had  with  graphic  charts 
corresponds  with  the  advantages  obtained  by  the 
statistician  who  was  anxious  to  aid  the  general  manager 
of  the  eastern  company,  mentioned  before.  He  uses 
his  graphs  to  keep  track  of  the  results  obtained  by  his 
salesmen.  The  cost  of  keeping  the  graphic  records  is 
moderate,  and  the  information  they  supply  is  extremely 
valuable  for  comparative  purposes.  His  method  is 
suggestive  and  probably  could  be  used  profitably  by 
any  manufacturer  or  wholesaler  desiring  a  compara- 
tive record  of  the  effectiveness  of  his  salesmen. 

As  part  of  his  office  equipment  this  sales  manager 
uses  a  flat-topped  desk  six  feet  long,  the  top  entirely 


Average 
number 

calls 
per  day 

Total 
sales 

Brown 

Smi  IWilliams 

J 

F 

M 

A 

iVl 

J 

J 

A 

S 

0 

N 

D 

J 

F 

M 

A 

M 

ir 

J 

A 

S 

0 

N 

D 

15 

75,000 

14 

70,000 

13 

65,000 

12 

60,000 

11 

55,000 

10 

50,000 

/ 

V 

\ 

ir 

..-' 

V 

9 

45,000 

n, 

/ 

r 

\ 

\ 

A 

r 

^ 

\ 

8 

40,000 

v 

/ 

^ 

\ 

J 

V 

, 

7 

35,000 

(1 

6 

30,000 

N 

^, 

" 

.'. 

v» 

'• 

■•, 

. 

5 

25,000 

t 

s»' 

\ 

,♦• 

.' 

*»     M 

\ 

4 

20,000 

'« 

3 

1 5,000 

2 

10,000 

1 

5,000 

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Figure  20:  A  monthly  record  of  individual  salesmen  can  be  kept  on 
this  convenient  form.  The  sales  manager  using  it  keeps  the  records 
of  27  salesmen  on  a  six-foot  length  of  millimeter  paper.  Similar  charts 
can  be  made  for  weekly  records,  by  increasing  the  length  of  the  paper. 

2S 


HOW  GRAPHS  CAN  HELP  39 

covered  by  a  piece  of  plate  glass.  The  comparative 
chart  is  kept  under  this  glass.  It  is  drawn  on 
millimeter  paper.  A  six-foot  length  of  this  paper 
takes  care  of  the  records  of  27  salesmen.  Figure  20 
suggests  the  framework  of  the  chart  as  it  is  arranged 
for  a  monthly  record.  If  so  desired,  the  comparisons 
could  be  made  weekly,  or  for  any  other  period. 

To  secure  the  information  which  goes  on  the  chart, 
each  salesman  is  provided  with  a  supply  of  post-cards. 
He  fills  out  one  of  these  every  day  and  mails  it  to  the 
office.  On  it,  in  the  convenient  spaces  it  provides,  he 
lists  the  number  of  calls  he  made  during  the  day,  the 
number  of  orders  he  obtained,  and  their  value.  This 
work,  all  understand,  must  be  done  on  time. 

When  the  cards  are  received  at  the  office,  the 
information  each  carries  is  transferred  to  the  sales- 
man's individual  summary  and  at  the  end  of  each 
month  the  figures  on  this  form  are  totaled  and  the 
averages  figured  for  the  current  period. 

The  entire  routine  in  connection  with  keeping  this 
chart  does  not  represent  more  than  two  days'  work  a 
month  for  a  clerk.  So  it  is  obvious  that  a  similar  plan 
can  be  installed  and  operated  at  a  correspondingly  low 
cost  by  any  sales  manager  in  any  line. 

WTien  a  new  manager  took  charge  of  the  sales  of 
another  house  he  wanted  to  know  which  were  the  best 
selUng  lines  and  which  lines  were  pushed  by  the  sales- 
men under  him.  To  determine  this  he  had  a  graph 
prepared  showing  the  sales  of  each  line  by  months  by 
salesmen  for  the  two  previous  years. 

Part  of  this  graph  is  shown  in  Figure  21.  It  shows 
at  once  that  Peterson  and  Greene  had  uniform  success 
with  lines  A  and  B.  Hanly  also  had  good  results  with 
line  B  but  was  weak  on  Hne  A.  Line  C  was  shown  at 
a  glance  to  be  the  weak  member  of  the  family,  while 
line  D  evidently  was  a  good  seller  in  some  territories 
but  not  so  good  in  others. 


40  BOOSTING  THE  SALES  VOLUME 

This  chart  told  the  sales  manager  more  about  the 
sales  in  half  an  hour  than  he  could  have  learned  in 
many  hours'  study  of  columns  of  figures.  ''I  never 
reahzed  before,"  he  said,  "what  a  help  it  was  to  have 
these  results  in  pictures.  Hereafter  I  am  going  to  keep 
a  graph  month  by  month  of  each  salesman's  work,  and 
I  will  have  blueprint  copies  of  these  graphs  made  and 
sent  to  the  salesmen  to  help  them." 

HERE  A  SIMPLE  GRAPH  TOLD  A  STORY  INSTANTLY.  AFTER 
TWO  HOURS  OF  TALK  HAD  FAILED 

Confronted  by  a  request  from  the  general  manager 
to  show  why  the  appropriation  for  the  direct  adver- 
tising of  a  certain  line  should  be  continued,  an  adver- 
tising manager  listed  in  two  columns  the  sales  for  each 
month  of  the  preceding  year  and  the  advertising  ex- 
penditure for  direct  mail  that  month.  The  figiu-es  did 
not  look  very  imposing.  He  decided  to  chart  them. 
The  result  (Figure  22)  told  a  story  at  a  glance  that 
an  hour  of  explanation  had  failed  to  get  across  to  the 
general  manager.  The  result  was  that  the  appro- 
priation was  continued  and  an  additional  sum  provided 
to  push  other  lines  which  needed  a  boost. 

With  the  beginning  of  a  new  year  one  manufacturer 
decided  to  find  out  just  how  conditions  had  affected 
his  business.  He  charted  the  sales  for  a  period  of  four 
years  as  shown  in  Figure  23.  The  result  was  a 
surprise  even  to  him.  He  had  not  realized  that  sales 
had  been  as  low  as  they  were  shown  to  be  in  one 
year,  and  he  had  not  had  it  forcefully  brought  to  his 
attention  that  the  sales  now  were  more  than  $500,000 
more  than  the  best  mark  before  the  war.  The  facts 
brought  out  led  to  a  strengthening  of  the  financial  re- 
sources of  the  company  to  take  care  of  further  expan- 
sion and  to  prepare  for  a  slump  if  conditions  changed. 

When  one  sales  manager  opened  new  markets  by 
mail  in  foreign  countries  and  in  the  domestic-foreign 


$   SfiOO 
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1916                                                     1917                                                  1918 

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Figure  21:  One  manager  has  charted  his  sales  by  lines  by  months 
over  a  period  of  two  years  and  a  part  of  a  third.  This  data  tells  which 
are  the  best  selling  lines,  and  which  lines  should  be  pushed  harder. 


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Figure  22:  This  chart  indicates  that  sales  increased  in  proportion  to 
the  amount  of  direct  advertising  done  throughout  the  year,  and  con- 
vinced the  firm  that  the  advertising  appropriation  should  be  continued. 


41 


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Figvire  23 :  Charting  of  sales  as  shown  above  led  to  the  strengthening 
of  one  manufacturer's  resources,  thus  prepeiring  his  business  for  further 
expansion.  During  abnormal  times,  business  depression  and  activity 
are  frequently  "guessed"  about.     Charts  like  this  one  give  the  facts. 

42 


HOW  GRAPHS  CAN  HELP  43 

territory  of  the  Philippines,  sales  were  slow  at  first  and 
difficulty  with  the  mails  led  to  discouragement. 

After  the  experiment  had  been  under  way  for  nearly 
a  year  and  a  half,  the  sales  manager  made  a  graph  of 
the  sales.  The  chart  showed  that  in  spite  of  several 
bad  slumps  the  general  tendency  was  upward.  He 
decided  to  continue  for  the  rest  of  the  year  and  that 
his  decision  was  wise  is  indicated  by  the  direction  of 
the  fines  for  the  last  six  months  on  the  chart  which 
you  will  find  in  Figm-e  24. 

In  using  graphs  it  is  important  to  arrange  them  so 
that  the  exact  figures  from  which  the  graph  is  drawn 
can  be  reproduced  and  so  that  information  explaining 
sudden  changes  in  the  curves  may  be  recorded,  accord- 
ing to  one  sales  manager  who  uses  graphs  extensively, 
and  has  had  very  good  results  from  them. 

This  manager  keeps  graphic  records  by  months  of 
sales,  selling  cost,  advertising,  profits,  and  so  forth. 
These  records  are  kept  on  4-by-6-inch  cards,  which 
can  be  filed  conveniently  and  as  easily  laid  out  for 
comparison  by  executives  interested. 

The  space  used  for  the  graphic  representation 
occupies  one  corner  of  the  card.  In  using  such  small 
space  the  scale  has  to  be  chosen  carefully  to  give  the 
right  proportions  and  at  the  same  time  to  include  the 
entire  range  likely  to  be  covered. 

In  the  illustration  (Figure  25)  is  a  reproduction 
of  one  of  the  cards  used  by  this  manager  to  chart  his 
selUng  costs  for  one  year.  Note  that  the  actual  figures 
are  given  along  the  left  side  of  the  card.  Figures  at 
the  bottom  represent  months. 

Experience  has  shown  this  sales  manager  that  it  is 
difficult  to  remember  from  one  year  to  another  just 
what  caused  a  marked  depression  or  increase  in  costs. 
For  this  reason  he  uses  the  symbols  shown  on  the 
graph  and  makes  notes  on  the  cards  which  explain 
the  sudden  changes  in  afi"airs. 


1 

75,000 
70,000 
65,000 
60,000 
55,000 
50,000 
45,000 
40,000 
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Record  of  sales  for  the  first  two 

years  after  opening  foreign  and 

domestic  foreign  territory 

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1916                                                                                    1917 

Figure  24:  Here  is  shown  one  concern's  record  of  sales  in  foreign  ter- 
ritory for  two  years.  The  first  year  was  not  encouraging,  but  the 
second  proved  that  the  aevelopment  of  this  business  should  be  continued. 


Name                                                   Address 

80,000 
70,000 
60,000 
50,000 
40,000 
30,000 
20,000 
10,000 

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Months 

Figure  25:  One  sales  manager  uses  the  graph  reproduced  here  to 
chart  his  selling  costs  for  the  j^ear.  The  actual  figures  are  given  at  the 
left,  while  the  figures  at  the  bottom  represent  the  months  of  the  year- 

44 


HOW  GRAPHS  CAN  HELP  45 

This  system  also  is  a  great  help  when  a  comparison 
is  made  of  costs  with  sales  and  the  like,  as  it  serves  as 
a  means  of  checking  up  other  departments.  This 
manager  uses  a  similar  set  of  cards  to  keep  a  record 
of  the  sales  and  expense  of  his  five  sales  agencies.  By 
using  this  system  he  is  able  at  any  time  to  make 
comparisons  between  any  two  agencies  or  between 
the  sales  and  costs  of  any  agency. 

To  get  the  best  results  from  graphs,  investigation 
indicates,  it  is  important  to  have  them  as  uniform 
in  design  and  as  easy  to  read  as  possible.  For  this 
reason  one  executive  has  adopted  the  plan  of  making 
all  vertical  scales  at  the  left  of  the  chart  and  all 
horizontal  scales  at  the  bottom.  If  more  than  one 
vertical  scale  is  used  the  second  one  generally  is  put 
at  the  right  although  sometimes  it  is  found  advan- 
tageous to  have  them  both  at  the  left.  This  executive 
also  uses  arrows  pointing  either  up  or  down  to  show 
which  way  the  curve  should  go  to  indicate  advan- 
tageous conditions.  This  plan  saves  a  great  deal  of 
time  in  the  reading  of  a  large  number  of  charts  and  is 
the  one  generally  advocated  by  specialists  who  have 
made  a  study  of  graphic  presentation. 

It  is  often  necessary  for  the  sales  manager  to  know 
exactly  how  his  sajes  are  distributed  to  enable  him  to 
tell  whether  his  salesmen  are  covering  their  territories 
properly  and  to  determine  on  promotion  work. 

For  this  purpose  a  map  often  is  more  effective  than 
a  graph.  Investigation  showed  that  pin  and  tack 
maps  have  been  used  successfully  by  many  manu- 
facturers to  plan  routes  for  their  salesmen  and  to  chart 
the  number  of  prospects  in  a  given  territory. 

One  concern  having  a  national  distribution  charted 
its  sales  by  states  on  the  basis  of  the  amount  of  sales 
for  each  100  prospects.  The  result,  as  shown  in  Figure 
A  of  Insert  I,  brought  out  some  facts  which  surprised 
the  sales  manager.    For  instance,  in  Illinois  and  New 


46  BOOSTING  THE  SALES  VOLUME 

York  where  the  company  had  a  large  volume  of  salet? 
the  chart  showed  that  these  amounted  to  only  a  small 
proportion  of  the  possible  sales  as  indicated  by  the 
number  of  prospects.  This  resulted  in  a  reorganization 
of  the  sales  force  in  these  two  states  and  in  a  more 
intensive  advertising  campaign  to  push  the  product, 
and  these,  in  turn,  to  more  business. 

Another  method  of  indicating  much  the  same  infor- 
mation was  used  by  another  sales  manager.  His 
system  includes  the  use  of  dots,  each  dot  representing 
."S500  in  sales  (Figure  B — Insert  I).  This  method  is 
considered  an  improvement  over  the  shading  method 
in  that  the  section  of  the  state  having  the  largest  sales 
can  be  more  clearly  indicated  by  the  greater  frequency 
of  dots  than  by  shading.  With  its  main  plant  in 
Illinois,  the  map  showed  a  big  distribution  in  that  and 
the  adjoining  states  and  through  the  Northwest.  It 
indicated,  however,  that  sales  were  lamentably  weak 
in  other  states.  Steps  were  taken  to  correct  this 
weakness.  This  company  also  has  a  small  auxiliary 
plant  in  the  South  and  it  will  be  noted  that  sales  in  this 
region  were  somewhat  increased,  probably  because  of 
the  presence  of  the  plant  on  the  ground. 

THIS  EFFECTIVE  MAP  PLAN  HELPS  ONE  SALES  MANAGER  TO 
KEEP  CLOSE  TAB  ON  ALL  THE  WORK 

One  sales  manager  has  in  his  office  a  large  map  of  the 
United  States  showing  all  railroad  lines.  Pins  show  how 
his  salesmen  are  covering  the  country  along  each  road. 
The  map  also  shows  where  the  various  branch  sales 
rooms  of  the  company  are  located. 

For  each  state  in  which  the  comp«-ny  has  salesmen 
there  also  is  a  separate  map.  Each  map  is  pasted  into 
the  bottom  of  a  shallow  drawer  and  all  the  drawers 
are  kept  in  a  cabinet.  If  any  one  state  is  divided  into 
two  or  more  sales  territories  there  is  a  map  for  each 
territory  made  up  and  filed. 


Figure  26:  One  clothing  house  whose  annual  ad  /ertising  appropriation 
totals  $300,000  divides  this  amount  into  salaries,  direct  mailing  news- 
papers, magazines,  posters,  and  miscellaneous,  as  shown  above.  Then 
it  divides  the  amount  of  each  appropriation  by  months  (Figure   27). 

«7 


--25 


Figure  27:  Here  are  the  divisions  of  a  magazine-advertising  appropria- 
tion of  $90,000,  by  months,  as  outlined  by  one  clothing  company 
(Figure  26).  Of  course,  the  divisions  are  not  equal,  as  more  is  spent 
for  advertising  clothing  at  certain  seasons  of  the  year  than  at  others. 

48 


□ 


Sales  less  than'500~- 
per  hundred  prospects 
Sale3*500-*lOOO 
per  hundred  prospects 
Sales ''1000-*15OO 
per  hundred  prospects 
Sales  *1500  -*2CX)0 
per   hundred  prospects 
Sales  »200O-»25O0 
per  hundred  prospects 


Toii-ins  Covered 
Complete  Route  of 
Complete  Route  of 


Figure  A:  One  concern 
states  on  the  basis  of  tl 
prospects.  Where  sales  w 
were   made   to   bring  the 


INSERT  J 


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e 


Figure  A:  One  concern  charted  its  sales  by  Figure  B:  Dotting  a  map  in  this  way— each 
states  on  the  basis  of  the  sales  to  each  100  dot  representing  $500  in  sales— gave  one  man- 
prospects.  Where  sales  were  low  extra  efforts  ager  an  accurate  idea  of  where  more  effort 
were   made   to  bring   them    up  to   the  mark.  should  be  made  in  his  advertising  and  selling. 


Figure    C:      Tacks  and  string  help  determine  Figure  D;     This  map,  in  which  branch  houses 

salesmen's   routes  for  one  concern.     Different  are  indicated  by  large-headed  tacks,  helps  one 

colored  strings  show  the  complete  route  of  each  concern  to  route  salesmen  and  set  their  quotas. 

salesman  and  how  much  of  it  has  been  covered.  The  heavy  lines  show  each  branch's  territory. 


HOW  GRAPHS  CAN  HELP  49 

Each  salesman  in  a  state  or  territory  is  represented 
on  the  map  by  a  pin  with  a  colored  head.  One  of 
these  pins  is  placed  on  the  map  on  each  town  the  sales- 
man visits.  If  more  than  one  salesman  visits  the 
same  town  this  is  shown  by  a  grouping  of  pins.  By 
this  system  the  sales  manager  and  his  assistants  have 
constantly  before  them  a  picture  of  the  route  each 
salesman  is  covering  and  can  check  up  from  the  daily 
reports  and  tell  just  where  any  man  is  at  a  given  time. 

"I  have  found  this  system  very  helpful  in  working 
out  the  shortest  routes  and  cutting  down  traveling 
expenses,"  says  this  sales  manager.  ''We  are  able 
also  to  check  up  quickly  if  a  salesman  misses  a  town." 

The  experience  of  this  manager  indicates  that  to 
get  the  best  results  from  the  map-and-tack  system 
it  is  best  to  use  a  cork  base  to  paste  the  maps  on  in 
the  drawers.  He  also  found  that  short  tacks  which 
could  be  pushed  into  the  map  up  to  the  head  were 
more  e*ffecti\'e  than  longer  tacks. 

Anothe^r  concern  uses  a  system  of  tacks  and  strings 
to  indicate  the  best  routes  for  salesmen.  Figure  C 
of  Insert  I  shows  how  this  concern  keeps  its  salesmen 
working  effectively  in  their  territories.  Tacks  with 
heads  of  various  colors  are  used  to  represent  the 
different  salesmen  and  the  routes  are  arranged  to  best 
advantage  with  the  railroads  in  the  territory.  This 
system  has  the  advantage  of  being  easily  adjusted 
if  it  is  found  desirable  to  change  the  routing. 

In  working  out  this  plan  the  sales  manager  uses 
one  colored  string  to  trace  the  route  and  another  to 
follow  the  progress  of  the  salesman  over  that  route. 
For  example,  for  salesman  A,  a  white  string  is  used 
to  indicate  his  complete  route.  Then  a  black  string 
is  attached  to  the  tack  at  the  starting  pointi  As  soon 
as  the  salesman  leaves  the  first  town  he  notifies  the 
office  by  telegraph  or  mail.  The  black  string  then 
is  fastened  to  the  tack  to  indicate  that  the  first  town 


eo 


75-- 


70 


Figr 
tion 
(Fig 
for  i 


HOW  GRAPHS  CAN  HELP  49 

Each  salesman  in  a  state  or  territory  is  represented 
on  the  map  by  a  pin  with  a  colored  head.  One  of 
these  pins  is  placed  on  the  map  on  each  town  the  sales- 
man visits.  If  more  than  one  salesman  visits  the 
same  town  this  is  shown  by  a  grouping  of  pins.  By 
this  system  the  sales  manager  and  his  assistants  have 
constantly  before  them  a  picture  of  the  route  each 
salesman  is  covering  and  can  check  up  from  the  daily 
reports  and  tell  just  where  any  man  is  at  a  given  time. 

"I  have  found  this  system  very  helpful  in  working 
out  the  shortest  routes  and  cutting  down  traveling 
expenses,"  says  this  sales  manager.  ''We  are  able 
also  to  check  up  quickly  if  a  salesman  misses  a  town." 

The  experience  of  this  manager  indicates  that  to 
get  the  best  results  from  the  map-and-tack  system 
it  is  best  to  use  a  cork  base  to  paste  the  maps  on  in 
the  drawers.  He  also  found  that  short  tacks  which 
could  be  pushed  into  the  map  up  to  the  head  were 
more  effective  than  longer  tacks. 

AnothejT  concern  uses  a  system  of  tacks  and  strings 
to  indicate  the  best  routes  for  salesmen.  Figure  C 
of  Insert  I  shows  how  this  concern  keeps  its  salesmen 
working  effectively  in  their  territories.  Tacks  with 
heads  of  various  colors  are  used  to  represent  the 
different  salesmen  and  the  routes  are  arranged  to  best 
advantage  with  the  railroads  in  the  territory.  This 
system  has  the  advantage  of  being  easily  adjusted 
if  it  is  found  desirable  to  change  the  routing. 

In  working  out  this  plan  the  sales  manager  uses 
one  colored  string  to  trace  the  route  and  another  to 
follow  the  progress  of  the  salesman  over  that  route. 
For  example,  for  salesman  A,  a  white  string  is  used 
to  indicate  his  complete  route.  Then  a  black  string 
is  attached  to  the  tack  at  the  starting  point.  As  soon 
as  the  salesman  leaves  the  first  town  he  notifies  the 
office  by  telegraph  or  mail.  The  black  string  then 
is  fastened  to  the  tack  to  indicate  that  the  first  town 


50  BOOSTING  THE  SALES  VOLUME 

has  been  covered,  and  so  on.  This  plan  enables 
anyone  in  the  department  to  tell  by  a  glance  at  the 
map  just  where  the  salesman  can  be  reached. 

If  there  is  special  business  for  the  salesman  to  take 
up  in  any  town  along  the  route,  as,  for  instance,  an 
important  collection  to  be  made,  this  fact  is  indicated 
in  advance  by  a  tack  of  a  different  color.  When  the 
black  string  shows  that  the  salesmen's  next  stop  will 
be  this  town  a  letter  is  mailed  containing  special 
instructions  for  the  task.  By  using  a  supplementary 
card  file  to  keep  the  salesmen's  reports  containing  the 
names  of  the  hotels  and  so  forth,  it  is  easy  to  get  in 
touch  with  the  man  on  the  road  at  any  time.  This  plan 
has  made  it  possible  quickly  to  change  a  man's  route. 

Another  concern  uses  a  tack  system  but  instead  of 
using  strings  to  connect  the  routes  it  uses  chalk  lines 
of  different  colors  to  indicate  the  progress  of  the 
salesmen  from  one  town  to  another.  This  plan  is 
considered  effective  as  there  is  not  the  danger  of  the 
strings  becoming  loose  or  out  of  place.  The  chalk 
lines  also  are  easy  to  change  if  conditions  make  it 
advisable  to  reroute  the  salesmen. 

One  sales  manager  uses  a  tack  map  to  visuahze 
the  branch  offices  of  the  company  and  the  territory 
covered  by  each  (Figure  D,  Insert  I). 

Another  concern — one  which  has  a  large  number  of 
agencies — uses  a  tack  map  to  keep  a  record  of  changes 
in  the  sales  force.  For  example,  a  blue  tack  indicates 
an  agency  that  needs  more  salesmen,  a  red  tack  indi- 
cates agencies  where  salesmen  are  available  for  trans- 
fer, a  green  tack  shows  that  the  agent  wants  a  new 
territory,  and  a  purple  tack  indicates  that  for  some 
reason  the  agent  ought  to  be  changed.  With  this 
map  before  him  the  sales  manager  is  able  to  act 
quickly  when  a  salesman  applies  for  a  new  territory 
and  he  can  tell  at  a  glance  whether  there  is  room  for 
a  new  salesman  and  just  what  territory  is  available. 


SIZE  OF  FARMS  OPERATED  BY  BUYERS  OF  ONE  SPECIALTY 

Figures  are  based  on  information  furnished  by  buyers  themseives- 

_ 


65.  Z% 

Operate 

^  Farms  of 

Over  50 

Acres 


Comparison  between  size  of  farms  of  buyers  of  one  specialty 
farmers  and  the  average  size  of  farms  throughout  the  U.  S. 


Size  of  Farm 


One  Specialty  Buyers      Average  of  U.   S. 


50  Acres  and  above 

89.3  Per  Cent 

64.5  Per  Cent 

100 

75.4  " 

41.9  " 

500 

20.7  " 

2.7  " 

1000 

10.1  " 

.8  " 

Figure  28:  This  chart  indicated  to  a  concern  selling  a  specialty 
article  by  mail  to  farmers  the  class  of  farmers  they  were  reaching,  and 
the  size  of  their  farms.  Further  investigation  revealed  that  over  75% 
of  their  product  was  used  by  farmers  working  farms  of  100  acres  or  more. 

51 


REACHING  FARM  OPERATORS 

Comparison  of  Position  of  Buyers  of  One  Specialty 
With  Average  of  all  U.  S.  Farmers 

Position  of  Average  Position  of  Buyers 

of  All  U.  S.  Farmers  of  One  Specialty 


62.1%  Owners 


Managers! 


37%  Tenants 


> 


63%  Owners 

and 

Managers 


Note  that  only 
1.2%  of  buyers 

of  this  special- 
ty are  tenants 

compared  to  37% 
tenants  as  the 
average  of  the 
entire  country 


75%  Owners 


92%  Owners 
\.        and 
^  Managers 


17%  Managers 


.1.2%  Tenants! 

6.8%  Dealers, 

I  County  Agents, 

Bankers.  Misc 


Figure  29:  Another  investigation  made  by  this  company  (Figure  28) 
was  to  determine  whether  its  customers  were  owners  of  their  own 
farms,  farm  managers,  or  tenants.  The  analysis  given  above  shows 
that  92%   of    purchasers  of  the  product  are  owners  and  managers. 

52 


1            3  X — X — X  Net  Sales  Total 

4  0--0--0  Regular  Edition  Gross 

6  »--x---x  Total  Returns                                               y^ 

>         '^- 

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0 

January  15        July15  January  16         July  16         January  17        July  17 


Figxire  30:  Gross  production,  total  gross  sales,  returns,  total  net  sales, 
and  net  profit  per  item  of  one  concern's  products  are  shown  on  this 
graph,  which  covers  a  three-year  period.  This  record  serves  as  a  check 
on  the  company's  agents,  and  tests  the  pull  of  the  advertising  as  well. 


Results  to  Jutie  10  E3               "'■™*' 
Results  to  Sept.  8    Ml 

Key 

1— General  Stores                                               S.OOO 

2 — Grocers 

3 — Hardware,    Sporting  Goods  and  so  forth 

4 — Agricultural  Implements 

5— Paints  and  Wall  Paper                                               0 

€ — Plumbers,  Steam  Fitters,  and  so  forth 

7— Druggists 

8— Books  A  Stationery 

9-gewelry,  Watches.                                            15,000 
10— Dry  Goods,    Notions,    Cloaks    and    Suits 
11— Clothing,     teen's  Furnishings 
1 2— Boots  and  Shoes 

13— Department  Store                                             10,000 
14—5*  10  Cent  Stores,  Tea,  Coffee,  Glassware 
15 — Musical  Instruments 
16 — Furniture  and  House  Furnishings 
,17-Undertakers                                                        5,000 
)8 — Lumber  Dealers 
19— Auto  Dealers,    Garages 
SO— Cleaners,  Dyers,  Laundries 
21— Miscellaneous 

1  1  M  M  1  M  '  1  '  ' 

Net  Orders  by  Lines 

1 

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12  3  4   5   6   7   8  9  10  1l12131415iei71U19  2a21 

Figure  31:  This  graph  shows  one  manufacturer  three  conditions:  (1) 
With  what  Hne  of  retailers  he  does  the  most  business;  (2)  where  the 
returns   are   smallest;   and,   (3)   what   lines   give   the   greatest   profit. 


4,400 

4,000 

3.600 

3,200 

2.800 

2,400 

2.000 

1,600 

1,200 

800 

400 

0 

■• 

1 

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month  by  agents 

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Se 

pt      Oct.      Nov.      Dec. 

Jan. 

Feb. 

Mar. 

Apr.       May      June 

Figure  32:  To  keep  track  of  each  month's  sales  by  agents  and  to 
check  these  sales  against  the  selling  cost  to  find  the  most  profitable 
agents,  one  concern  prepared  the  graphs  shown  here  and  in  Figure  33. 


HOW  GRAPHS  CAN  HELP  55 

The  company  keeps  this  map  and  others  showing 
territory  divisions,  sales,  and  so  forth,  in  a  map 
case  built  into  the  wall.  The  maps  are  hung  on  weights 
like  a  window  sash,  so  that  they  can  be  pushed  up 
out  of  the  way  when  not  in  use. 

In  the  advertising  end  of  the  sales  organization, 
investigation  indicates  that  maps  and  graphs  are 
equally  as  useful  as  in  the  charting  of  sales  and  terri- 
tories and  they  often  help  keep  the  advertising  manager 
from  exceeding  his  appropriation.  As  advertising 
has  a  direct  bearing  on  the  seUing  cost  we  logically 
may  consider  these  methods  here. 

For  example,  one  clothing  concern  spends  about 
$300,000  a  year  for  advertising.  At  the  beginning  of 
the  year  the  appropriation  is  divided  up  for  the  dif- 
ferent classes  of  advertising  expense  about  as  shown 
in  Figure  26  on  page  47. 

THIS  PI^AN  MAY  PROVE  HELPFUL  WHEN  YOU  PREPARE  TO 
DETERMINE  YOUR  ADVERTISING  APPROPRIATION 

With  this  control  chart  before  him  the  advertising 
manager  can  tell  just  how  much  he  has  to  spend  for 
each  type  of  advertising.  He  then  proceeds  to  divide 
each  amount  by  months.  The  seasons,  of  course, 
determine  to  a  large  extent  the  amount  of  magazine 
advertising  done  in  any  one  month.  For  example, 
in  March  and  April  when  the  spring  line  is  being 
pushed,  the  proportion  of  the  appropriation  spent  is 
much  larger  than  in  July  and  August.  In  October 
and  November,  when  the  autumn  suits  and  over- 
coats come  on  the  market  the  proportion  rises  again. 

How  this  manager  divides  his  magazine  appropria- 
tion is  shown  in  Figure  27.  In  a  like  manner  he 
decides  in  advance  about  how  he  will  distribute  his 
appropriation  for  newspapers,  direct  mail,  and  the 
other  items  over  the  year.  The  item  of  salaries  is, 
of  course,  fairly  constant  for  each  month. 


56  BOOSTING  THE  SALES  VOLUME 

One  concern  which  sells  a  specialty  to  farmers  by 
mail  made  a  careful  investigation  of  its  customers  to 
determine  the  class  of  farmers  it  was  reaching  and  in 
this  way  to  check  the  quality  of  its  mailing  list. 
The  company  also  analyzed  the  information  obtained 
to  find  out  the  average  size  of  the  farms  operated  by 
their  customers.  It  was  found  in  this  way  that  more 
than  75%  of  the  product  was  used  on  farms  of  more 
than  100  acres.  How  these  facts  were  tabulated  is 
shown  in  the  chart  in  Figure  28. 

For  another  purpose  the  company  was  interested  in 
knowing  whether  the  customers  were  owners  of  their 
own  farms,  farm  managers,  or  renters.  Another 
analysis  of  the  orders  (Figure  29)  showed  that  a  large 
percentage  of  its  purchasers  were  farm  owners. 

A  graph  showing  the  gross  production,  sales,  returns, 
and  net  sale  total  and  the  net  profit  per  item  helps 
another  concern  to  keep  a  close  record  of  the  effec- 
tiveness of  the  agents  handling  its  product.  Since  the 
sales  depend  largely  on  the  advertising  and  on  the 
attractive  appearance  of  the  article,  this  record  also 
serves  to  test  the  effectiveness  of  the  advertising 
department.  How  this  has  worked  out  for  three  years 
is  shown  in  Figure  30. 

With  what  line  of  retailing  do  we  do  the  most 
business?  Where  are  our  returned  goods  smallest  and 
what  line  gives  us  the  greatest  profit?  These  questions 
caused  a  lot  of  worry  for  the  sales  manager  of  a  con- 
cern which  makes  a  specialty  selling  to  retail  mer- 
chants. This  specialty  is  sent  out  on  trial.  The  sales 
manager  had  the  information  but  it  was  spread  over 
many  pages  and  included  many  columns  of  figures. 
He  decided  to  put  the  information  in  more  accessible 
shape.  He  listed  21  retail  lines  and  prepared  a  graph 
(Figure  31)  which  would  show  the  number  of  orders 
from  each  Une  in  each  section,  and  in  another  the 
actual  business  after  the  returns  had  been  deducted. 


— 

— 

— 



— 

'  ■  'U 

Percentage  cost  to    - 

FT^ 

— 

"~ 

~ 

~~ 

Miller   160 

— 

^ 

150 

- 

r 

I 

t 

130 

1 

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— 

120 

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20 

10 

0 

Sept.  Oct.  Nov.  Dec.  Jan.  Feb.  Mar.  Apr.  May  June 


Figure  33 :  It  is  interesting  to  compare  the  selling  cost  of  each  agent 
of  one  concern,  as  shown  here,  with  his  total  sales,  as  shown  in  Figure 
32.  You  will  note  in  each  instance  that  as  the  volume  of  each  agent's 
sales  increases,  his  percentage  cost  of  selling  decreases,  and  vice  versa. 

?,7 


0 
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7 
6 
5 
4 
3 
2 
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30 
29 
28 
27 
26 
25 
24 
23 
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1» 
15 
14 
13 
12 
11  . 
10 
9 
8 
7 
6 
5 
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Figure  34:  Charting  shipments,  cancelations,  and  payments  on  or- 
ders for  products  in  this  manner  proved  an  excellent  method  for  one 
sales  manager  to  determine  just  which  lines  were  most  profitable.  The 
figures  at  the  left  indicate  dates,  and  those  at  the  bottom  value  of  orders, 

58 


V.-.-:-Vr.v.vii 

::I-g:J'KA] 
..'itj'.*'.  • 


•••  ■ 


.'ffi 


83.8 


b  /.  /     (  a^ji     I        .J 


58.5 


107.6 


Figure  A:  This  analysis 
cernb  by  states  in  comj 
represents  1 ,000  concern 
lation   basis,   hence   the 


INSERT  II 


59 

icrs  as 
figure 
)wable 
h  lines 
There- 

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3tums. 
orders 
•eturns 
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agents 
to  find 
mcern, 
I  high, 
53. 

rst  his 
IS  very 
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100%. 
''  mail, 
.dually 
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factors 
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is  easy 
fitable. 
cturers 
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FIGURE 
"A" 


FIGURE 
"B" 


Figure  A;  This  analysis  shows  the  number  of  rated  con-  Figure  B:     By  comparing  Figure  A  with  the  order  lists, 

cemst  by  states  in  comparison  to  population.     Each  dot  one  concern  found  that  it  sold  67.3%  of  the  rated  concerns. 

represents  1,000  concerns.    The  map  is  drawn  on  a  popu-  This  map  shows  how  the  orders  were  distributed.    The 

lation  basis,  hence  the  distorted  shape  of  the    states.  shaded  portions  are  those  below  the  general  sales  average. 


HOW  GRAPHS  CAN  HELP  59 

By  setting  an  arbitrary  standard  of  8,000  orders  as 
being  profitable  in  any  one  line,  and  by  setting  a  figure 
of  3.2%  as  the  maximum  number  of  returns  allowable 
he  was  able  to  make  a  chart  showing  just  which  lines 
gave  the  best  results  and  to  act  accordingly.  There- 
after he  did  not  have  to  guess — he  knew. 

General  stores  (see  Figure  31  again)  are  shown  to 
be  well  within  the  profit  line  in  both  orders  and  returns. 
In  Line  16  (furniture)  however,  the  number  of  orders 
is  below  the  profit  mark  but  the  percentage  of  returns 
is  so  small  that  the  total  business  is  found  to  be  well 
above  the  profit  fine  and  worth  continuing. 

To  keep  track  of  the  total  sales  a  month  by  agents 
and  to  check  these  sales  against  the  selling  cost  to  find 
the  most  profitable  agents,  one  specialty  concern, 
whose  gross  profit  is  large,  and  selling  expense  high, 
prepared  two  graphs  similar  to  Figures  32  and  33. 

Note  the  line  for  Miller  on  each  chart.  At  first  his 
percentage  of  selling  cost  was  160%  and  his  sales  very 
small.  After  that,  hovv-ever,  his  sales  increased  and 
his  percentage  of  selling  cost  dropped  more  than  100%. 

One  concern  started  to  market  a  new  line  by  mail. 
Shipments  of  the  product  were  made  in  gradually 
increasing  quantities  until  after  the  first  10  days  about 
1,350  orders  were  going  out  a  day.  After  the  first 
week  the  returned  goods  began  to  come  in,  and  after 
two  weeks  the  payments  for  goods  kept  began. 

To  show  the  relation  between  these  three  factors 
the  sales  manager  made  a  graph  similar  to  the  one  in 
Figure  34.  With  this  picture  before  him  it  was  easy 
to  determine  just  when  the  line  began  to  be  profitable. 

A  concern  which  sells  its  product  to  manufacturers 
the  country  over  wanted  to  determine  the  effectiveness 
of  its  distribution  among  concerns  rated  above  a 
certain  amount.  To  do  this,  it  first  was  necessary  to 
find  how  these  concerns  were  distributed  according 
to  population  and  not  on  its  square  mileage. 


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Figure  34:  Charl 
ders  for  products 
sales  manager  to  c 
figures  at  the  left  i 


HOW  GRAPHS  CAN  HELP  59 

By  setting  an  arbitrary  standard  of  8,000  orders  as 
being  profitable  in  any  one  line,  and  by  setting  a  iigure 
of  3.2%  as  the  maximum  number  of  returns  allowable 
he  was  able  to  make  a  chart  showing  just  which  lines 
gave  the  best  results  and  to  act  accordingly.  There- 
after he  did  not  have  to  guess — he  knew. 

General  stores  (see  Figure  31  again)  are  shown  to 
be  well  within  the  profit  line  in  both  orders  and  returns. 
In  Line  16  (furniture)  however,  the  number  of  orders 
is  below  the  profit  mark  but  the  percentage  of  returns 
is  so  small  that  the  total  business  is  found  to  be  well 
above  the  profit  Hne  and  worth  continuing. 

To  keep  track  of  the  total  sales  a  month  by  agents 
and  to  check  these  sales  against  the  selling  cost  to  find 
the  most  profitable  agents,  one  specialty  concern, 
whose  gross  profit  is  large,  and  selling  expense  high, 
prepared  two  graphs  similar  to  Figures  32  and  33. 

Note  the  line  for  Miller  on  each  chart.  At  first  his 
percentage  of  selling  cost  was  160%  and  his  sales  very 
small.  After  that,  hovv-ever,  his  sales  increased  and 
his  percentage  of  selling  cost  dropped  more  than  100%. 

One  concern  started  to  market  a  new  line  by  mail. 
Shipments  of  the  product  were  made  in  gradually 
increasing  quantities  until  after  the  first  10  days  about 
1,350  orders  were  going  out  a  day.  After  the  first 
week  the  returned  goods  began  to  come  in,  and  after 
two  weeks  the  payments  for  goods  kept  began. 

To  show  the  relation  between  these  three  factors 
the  sales  manager  made  a  graph  similar  to  the  one  in 
Figure  34.  With  this  picture  before  him  it  was  easy 
to  determine  just  when  the  line  began  to  be  profitable. 

A  concern  which  sells  its  product  to  manufacturers 
the  country  over  wanted  to  determine  the  effectiveness 
of  its  distribution  among  concerns  rated  above  a 
certain  amount.  To  do  this,  it  first  was  necessary  to 
find  how  these  concerns  were  distributed  according 
to  population  and  not  on  its  square  mileage. 


60  BOOSTING  THE  SALES  VOLUME 

One  of  the  executives  prepared  a  map  similar  to  the 
one  shown  in  Figure  A  of  Insert  II.  The  distorted 
appearance  is  due  to  the  fact  that  the  map  is  drawn  to  a 
population  scale  and  not  on  a  square-mile  basis.  In 
other  words  the  size  of  each  state  on  the  map  depends 
on  its  population. 

With  this  map  drawn,  it  was  easy  for  the  executive 
to  put  in  the  dots  showing  the  number  of  rated  con- 
cerns in  each  state,  in  proportion  to  population.  Each 
dot  represents  1,000  concerns. 

A  comparison  of  the  figures  used  in  making  up  this 
map,  with  the  order  lists  showed  that  on  an  average 
for  the  country  the  concern  had  67.3%  of  the  rated 
concerns  on  its  books.  How  these  customers  were 
distributed  is  shown  in  another  map  (Figure  B,  Insert 
II).  White  portions  show  states  in  which  the  dis- 
tribution is  above  the  average  and  the  shaded  portions 
are  below  the  average.  With  this  information  at  hand 
it  is  easy  to  determine  where  the  greatest  advertising 
expenditure  shall  be  made  during  the  next  few  months. 

"If  I  had  used  graphs  and  maps  long  ago,  I  would 
have  saved  much  midnight  oil  and  many  weary  hours 
poring  over  columns  of  figm-es,"  said  one  sales  execu- 
tive. "I  believe  there  are  very  few  sales  and  adver- 
tising managers  who  realize  the  aid  these  records  can 
be  to  them.    I  am  sure  I  didn't  until  recently.' 

This  executive  expresses  a  view  which  many  others 
are  adopting.  Investigation  indicates  that  the  use  of 
graphs  and  maps  for  charting  sales  and  advertising 
returns  is  increasing  rapidly,  and  with  their  increased 
use  usually  comes  a  saving  in  time  and  an  increased 
eii'ectiveness  on  the  part  of  all  concerned. 


TOURING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  sjnnbolize  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  Publica- 
tions are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  knew 
so  well  during  the  war. 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
of  the  A.  W.  SHAW  COMPANY 


SECTION  10 

Reducing  Selling  Costs  Without 
Losing  Selling  Power 


HOW  A  COST  SYSTEM  HELPS  TO  LOWER 
SELLING  COSTS 

A  RE  selling  costs  going  up  or  down?  Will  our 
/\  market  continue?  Will  it  grow,  or  will  it  vanish 
•^  ^in  the  next  few  years?  How  shall  we  plan  to 
meet  the  changes  which  may  come?  These  and  like 
questions  today  are  confronting  sales  managers,  manu- 
facturers, and  wholesalers  in  all  parts  of  the  country 
more  forcefully  than  ever  before,  it  is  found. 

''Selhng  conditions  in  the  last  few  years  have  under- 
gone the  most  radical  changes  of  any  hke  period  in 
history,"  declared  one  business  man.  ''I  believe  it  is 
the  beginning  of  an  awakening  among  manufacturers 
and  wholesalers  to  the  importance  of  giving  more  and 
closer  attention  lo  sales  costs  and  methods.  They  are 
forced  by  abnormal  conditions  to  study  intensively 
this  end  of  their  business.  But  this  movement  will 
not  cease  with  the  return  of  business  to  a  more  normal 
status.  I  believe  that  the  changes  which  ar*^  being 
made  today  will  develop  into  an  effective  permanent 
reorganization  which  will  have  its  climax  long  after 
business  is  on  a  more  settled  basis." 

"Most  of  us  have  known  our  production  costs  for 
years,"  said  one  manufacturer.  ''But  we  have  neg- 
lected to  standardize  the  sales  end  of  our  business. 
Now  we  are  forced  by  rising  selling  costs  to  recognize 
the  vital  need  of  organizing  our  sales  force  on  a  more 
effective  footing.  Many  of  us  got  a  severe  shock 
when  confronted  with  the  sudden  necessity  of  meeting 

113 

Copyright,  1921,  by 

by  A.  W.  SHAW  COMPANY 

as  a  part  of  the  Shaw  Selling  Series 


114  HAIMMERING  SALES  COSTS  DOWN 

new  conditions.    We  had  to  study  our  costs  and  develop 
new  sales  plans  almost  overnight,  it  seemed." 

To  meet  the  steadily  rising  cost  of  selling,  investiga- 
tion indicated  that  progressive  business  men,  quite 
generally  have  adopted  one  or  more  of  eight  broad 
methods  for  raising  their  sales  organizations  to  new 
standards  of  efficiency.  These  eight  methods,  de- 
tailed discussion  of  which  is  given  in  this  and  other 
sections  of  this  series,  are: 

1.  Standardized  methods  of  figuring  selling  costs. 

2.  Better  methods  of  organizing  and  training  the 
sales  force. 

3.  More  effective  plans  for  reducing  traveling  and 
entertainment  expenses. 

4.  More  effective  methods  of  analyzing  the  field  to 
fix  more  profitable  and  logical  sales  quotas. 

5.  Better  advertising  methods. 

6.  Better  waj^s  to  meet  competition. 

7.  More  effective  methods  for  developing  coopera- 
tion with  dealers. 

8.  Methods  to  standardize  and  distribute  products 
to  better  advantage. 

Perhaps  one  of  the  most  startling  facts  brought 
out  by  investigation  is  the  almost  utter  lack  of  uni- 
formity in  methods  of  figuring  sales  costs,  even  among 
concerns  in  the  same  fine  of  business.  As  a  striking 
example,  let  us  take  that  of  two  manufacturers. 

These  concerns  are  located  in  the  same  territory. 
They  manufacture  practically  the  same  quahty  of 
goods.  Both  are  national  advertisers,  and  both  have 
fairly  large  sales  forces.  Either  concern  probably 
could  tal^:e  over  the  other  and  run  it  well. 

But  look  at  the  difference  in  their  methods  of  handhng 
sales  and  figining  selling  costs.  In  one  concern  the 
minute  the  goods  are  manufactured  they  are  turned 
over  entirely  to  the  sales  department.     From  the  time 


TESTED  SALES  ACCOUNTING  115 

the  product  is  ready  to  leave  the  factory  all  the  cost3 
are  charged  to  sales.  The  sales  department  bears  a 
big  share  of  all  salaries,  office  wages,  rent  for  space, 
heat,  light,  taxes,  and  so  forth.  And,  as  a  result,  the 
sales  cost  is  very  high. 

Here  is  the  condition  in  the  other  concern.  The  only 
costs  charged  against  sales  are  the  salaries  and  ex- 
penses of  the  sales  force.  Even  shipping  costs  are 
charged  to  the  production  account.  Of  course,  the 
selhng  expense  is  very  low  on  the  basis. 

''I  wish  all  the  concerns  in  our  fine  could  get  together 
and  standardize  their  poUcies  as  to  sales  expense/' 
said  the  president  of  one  of  these  companies.  *'It  is 
the  one  big  need  in  our  business.  I  believe  we  are 
coming  to  it  soon  and  I  am  ready  to  meet  my  com- 
petitors more  than  half  way  at  any  time." 

On  pages  116  to  125  you  will  find  34  tables  giving 
indicated  selhng  costs  from  206  concerns  in  different 
fines.  Study  these  cost  tables  carefully.  They  show, 
perhaps  as  nothing  else  could,  the  need  for  stand- 
ardized methods  of  figuring  selling  costs.  In  the 
section  of  the  series  on  "Graphic  Methods  of  Sales 
Analysis"  also  are  given  many  tables  of  valuable  costs, 
which  are  worthy  of  careful  consideration. 

The  cost  tables  on  page  120  give  you  the  average 
indicated  total  cost  of  doing  business  in  five  fines  of 
wholesahng.  All  the  firms  included  in  these  tables 
do  an  annual  business  of  more  than  SI, 000,000  and 
some  of  them  have  a  gross  income  of  many  milfions.* 

Now,  in  the  remaining  pages  of  this  section,  let  us 
consider  a  few  examples  of  some  of  the  cost  problems 
business  men  are  up  against,  and  how  some  of  them 
are  being  met  to  keep  down  rising  sales  costs. 


♦Investigation  indicated  that  selling  costs  among  these  firms  were  much  better 
standardized  than  among  concerns  doing  manufacturing  only.  The  reason  for  this 
apparently  was  because  most  of  them  started  as  wholesalers  and  their  aim  was  centered 
on  selling  rather  than  manufacturing.  Therefore  their  chief  attention  wae  placed  on 
sales  organization  and  costs  rather  than  on  production  costs. 


SELLING  COSTS  IN  PERCENTAGES,  FROM  THE  BOOKS 
OF  206  MANUFACTURERS  AND  WHOLESALERS 

Selling  costs  in  the  tables  which  follow  indicate  to  many  manufacturers 
and  wholesalers  the  need  for  a  standardized  method  of  figuring  this 
cost.  As  you  go  through  the  tables  note  how  concerns  differ  on  what, 
items  should  be  charged  to  selling  expense,  and  also  on  how  great  a 
percentage  of  each  item  should  be  allocated  to  the  selling  cost.  Location 
was  not  considered  in  securing  these  costs,  but  there  is  a  fair  repre- 
sentation from  every  section  of  the  country.  If  selling  costs  on  just 
what  you  handle  are  not  found  in  these  tables,  and  you  would  like  to 
have  them,  write  to  the  Librarian  of  the  A.  W.  Shaw  Company, 
Chicago,  who  will  be  glad  to  supply  them,  if  they  are  available. 


A  LACE  MANUFACTURER 
(Annual  Salea  About  $400,000) 
Below  are  given  the  selling  costs  re- 
ported by  a  lace  manufacturer  in  a  south- 
ern city.  Note  (1)  that  commissions  paid 
far  exceed  salaries,  and  (2)  that  adver- 
tising is  a  heavy  item.  Costs  have  risen 
5%  in  five  years  with  this  house. 

1.  Salaries: 

Salesmen    1.0 

Administrative 6.0 

2.  Commissions 5.0 

3.  Traveling  expense 2 .0 

4.  Office  expense 0.5 

5.  Advertising 3.5 

Total  selling  costs 17 .0 


A  GLOVE  MANUFACTURER 
(Annual  Sales  About  $125,000) 
From  the  Pacific  Coast  one  glove  man- 
ufacturing concern  reports  that  it  pays 
its  salesmen  5.8%  of  sales  in  commissions, 
1.3%  in  salaries  and  that  traveling  ex- 
penses amount  to  2.9%  of  sales.  The 
territory  it  covers  is  of  moderate  size, 
however,  and  perhaps  this  fact  helps  to 
overcome  the  handicap  of  not  very  large 
volume. 

1.  Salesmen's  salaries 1 .30 

2.  Commissions 5.80 

3.  Traveling 2.90 

4.  Advertising 0.13 

Total  selling  costs 10.13 


A  NOVELTY  MANUFACTURER 
(Annual  Sales  About  $75,000) 

The  items  of  commissions  and  shipping 
loom  large  in  the  selling  costs  of  this 
manufacturer,  located  in  a  southern 
state.  Expensive  collections  and  unwise 
credits  also  mount  high,  but  not  ex- 
tremely so  when  it  is  considered  that  he 
deals  directly  with  small  retailers,  many 
of  whom  are  not  strong  financially. 

1.  Commissions 6.00 

2.  Collections  and  credits 2.00 

3.  Shipping 3.00 

4.  Advertising 0.1.^ 

Total  selling  costs 11.15 


A  MANUFACTURER  OF  STEEL 
PRODUCTS 

(Annual  Sales  About  $2,500,000) 
While  salesmen's  salaries  for  this  man- 
ufacturer eat  up  2  %  of  total  gross  sales, 
traveling  expenses  run  them  a  close 
second  with  a  mark  of  1.6%.  This  man- 
ufacturer does  not  do  an  exceptionally 
big  business  for  his  line  but  his  costs 
apparently  are  well  under  control,  as  the 
total  of  4.7%  indicates. 

1.  Salesmen's  salaries 2.0 

2.  Rent 0.2 

3.  Commissions 0.4 

4.  Traveling 1 .6 

5.  Advertising 0.5 

Total  selling  costs 4.7 


116 


A  MACHINERY  MANUFACTURER 
(Annual  Sales  About  $550,000) 
This  is  a  eastern  house  which  makes 
heavy  machinery.  Here  again  the  lack 
of  standardization  of  manufacturers'  sell- 
ing costs  is  evident.  Unusually  heavy 
percentages  of  certain  items  are  charged 
by  this  house  into  selling  costs. 

1.  Salaries: 

Salesmen 6 .75 

Office 3.74 

Administrative 2 .08 

2.  Rent 1.20 

3.  Office: 

Supplies O.GO 

Telephone,  telegraph,  and 

postage 0. 74 

4.  Insurance  and  taxes 0 .21 

5.  Bad  debts 0.36 

6.  Collections  and  credits 2.73 

7.  Traveling 2 .61 

8.  Shipping 1 .50 

9.  Interest  and  depreciation ...      1 .78 
10.     Advertising 1.00 

Total  selling  costs 25 .30 


AN     ELECTRICAL-GOODS     MANU- 
FACTURER 

(Annual  Sales  About  S310,000) 
Advertising  hands  quite  an  upward 
jolt  to  selling  expense  with  this  electrical- 
goods  concern.  Note  also  that  office 
salaries  charged  to  selling  are  higher  than 
salesmen's  salaries.  This  house  does  a 
big  mail-order  business,  perhaps  ex- 
plaining the  high  office-salaries  item. 

1.  Salaries: 

Salesmen 2.10 

Office 2.60 

Administrative 0.70 

2.  Rent 0.03 

3.  Office  expense: 

Supplies 0.30 

Telephone,  telegraph,  and 

postage 0.30 

4.  Insurance  and  taxes 0.01 

5.  Heat  and  light 0 .02 

6.  Collections  and  credits 0.20 

7.  Traveling  expense 0 .30 

8.  Shipping 0.80 

9.  Interest  and  depreciation ..  .     0.20 
10.     Advertising 2 .  20 

Total  selling  costs 9 .96 


A  FOOD-PRODUCTS  MANUFAC- 
TURER 

(.Annual  Sales  About  $2,250,000) 
Interest  and  depreciation  cut  a  big 
figure  in  this  manufacturer's  selling  cost. 
His  product  is  perishable  and  spoiled 
goods  are  listed  under  this  item — 
whether  logically  or  not,  who  can  suy? 
Percentages  of  salaries  and  commissions 
apparently  are  held  to  reasonable  per- 
centages by  this  concern. 

1.  Salaries: 

Salesmen 2 .00 

Office 0.30 

2.  Commissions 2 .25 

3.  Office  expense: 

Supplies 0.10 

Telephone,  telegraph,  and 

postage 0.10 

4.  Bad  debts 1.10 

5.  Collections  and  credits 0.14 

6.  Traveling 0.14 

7.  Shipping 0.35 

8.  Warehouse 0.15 

9.  Interest  and  depreciation.  .  .     4.00 
10.     Advertising 0 .35 

Total  selling  costs 9  .98 


A  CLOTHING  MANUFACTURER 

(Annual  Sales  About  $50,000) 
Although  the  volume  of  sales  of  this 
manufacturer  is  a  small  one,  apparently 
he  has  been  successful  in  holding  selling 
costs  to  a  reasonable  figure,  due  in  some 
measure  perhaps  to  the  fact  that  his 
salesmen  work  mainly  on  a  salary  basis. 
Shipping  is  a  heavy  item  against  selling 
expense  with  this  manufacturer. 

1.  Salaries: 

Salesmen 2  .00 

Office 1.60 

2.  Commissions 0 .20 

3.  Office  expense: 

Supplies 0 .50 

Telephone,  telegraph,  and 

postage 0 .20 

4.  Bad  debts 0.12 

5.  Collections  and  credits 0 .20 

6.  Traveling 2 .00 

7.  Shipping 6.00 

8    Advertising 0.15 

Total  selling  costs 12 .87 


117 


ANOTHER  NOVELTY  MANU- 
FACTURER 
(Annual  Sales  About  $100,000) 
Commissions    and     advertising    bulk 
large  in  the  si'Uing  cost  of  this  eastern 
novelty  manufacturer.     The  advertising 
is  mainly  trade-paper  space,  used   with 
a   view   to   getting   wide  jobber   distri- 
bution. 

1.  Commissions 5.00 

2.  Office  supplies 0.33 

3.  Shipping 2.50 

4.  Advertising 5.50 

Total  selling  costs 13 .33 


ANOTHER  CLOTHING  MANU- 
FACTURER 
(Annual  Sales  About  $100,000) 
Here  we  have  a  clothing  manufacturer 
who  charges  a  percentage  of  both  office 
and  administrative  salaries  into  the  selling 
cost.     With  a  small  volume  his  selling 
cost   runs   high,    and   it   has  increased 
greatly  since  1915. 

1.  Salaries: 

Office 1.0 

Administrative 1 .5 

2.  Rent 0-5 

3.  Commissions 6.0 

4.  Office  supplies 0.5 

5.  Traveling 4.5 

6.  Advertising 2.6 

Total  selling  costs 14.5 


A  SECOND  FOOD-PRODUCTS 

MANUFACTURER 
(Annual  Sales  About  $2,000,000) 
Advertising  is  a  big  item  with  this  food- 
products  manufacturer,  who  manufac- 
tures a  nationally  advertised  specialty. 
Note  (1)  that  he  charges  in  at  least  a 
fairly  large  percentage  of  office  salaries, 
and  that  (2)  salesmen  are  paid  both 
salary  and  commission. 

1.  Salaries: 

Salesmen 1 .01 

Office 5.11 

2.  Commissions 4 .27 

3.  Office  expense: 

Supplies 0.04 

Telephone,   telegraph,  and 

postage 0 .06 

4.  Traveling 0.10 

5.  Advertising 3 .96 

Total  selling  costs 14 .55 


A  THIRD  CLOTHING  MANUFAC- 
TURER 
(Annual  Sales  About  $300,000) 
This    is    a    middle    western    concern. 
Note  that  its  sales  are  not  charged  with 
several  items  that  many  concerns  include. 

1.  Commissions 7 .00 

2.  Bad  debts 0.25 

3.  Traveling 0.20 

4.  Advertising 0 .50 

Total  selling  costs 7 .95 


ANOTHER  MACHINERY 
MANUFACTURER 
(Annual  Sales  About  $200,000) 
This  firm,  in  the  Middle  West,  manu- 
factures a  specialty  sold  in  hardware  and 
department  stores.     Sales  costs  with  it 
have   advanced   about   2%   during   the 
past  two  years. 

1.  Salesmen's  Salaries 5.0 

2.  Office  expense: 

Supplies 0.5 

Telephones,  telegraph,  and 

postage 1.5 

3.  Heat,  light  and  power 1.4 

4.  Bad  debts 2.0 

5.  Collections  and  credit 0.3 

6.  Interest  and  depreciation 2.4 

7.  Advertising 0.7 

Total  selling  costs 13.8 


A     FARM-IMPLEMENT     MANU- 
FACTURER 
(Annual  Sales  About  $1,000,000) 
This  concern  distributes  its  products 
through  retailors  and  through  six  branch 
houses  in  cities  in  western  states.     The 
higher  selling  costs  may  be  accounted  for, 
in  part  at  least,  by  competition. 

1.  Salaries: 

Salesmen 3.0 

Office 3.0 

2.  Commissions 0.2 

3.  Office  expense: 

Supplies 0.7 

Telephone,    telegraph,    and 

postage O.S 

4.  Traveling 3.0 

5.  Bad  debts 0.5 

6.  Collections  and  credits 0.1 

7.  Advertising 0.3 

Total  selling  costs 11 .3 


118 


A    CEMENT    AND    LIME    MANU- 
FACTURER 
(Annual  Sales  About  $1,000,000) 
This    eastern    manufacturer    has    his 
Belling  costs  available  at  all  times,  and, 
as  you  will  note,  carried  out  into  three 
decimal  places.    You  will  observe,  how- 
ever, that  he  does  not  believe  in  charging 
too  heavy  a  percentage  of  the  cost  of 
items  into  selling  expense,  and  this,  of 
course,  has  a  direct  bearing  on  his  low 
total  selling  cost. 

1.  Salaries: 

Salesmen 0.995 

Office 0.576 

Administrative 0 .288 

2.  Rent 0.072 

3.  Commissions 0.830 

4.  Office  expense: 

Supplies 0.149 

Telephone,   telegraph  and 

postage 0.240 

5.  Insurance  and  Taxes 0.005 

6.  Traveling 0.773 

7.  Shipping 0.058 

8.  Interest  and  depreciation.  .  .  0.005 

9.  Advertising 0.734 

Total  selling  costs 4 .725 


A     RUBBER-SPECIALTY     MANU- 
FACTURER 
(Annual  Sales  About  $1,150,000) 
Selling  costs  for  this  firm  have  increased 
6%  over  a  two-year  period,  and  only  the 
employment   of    more    effective    selling 
methods  has  held  them  within  anything 
like  reasonable  bounds.     Of  course,  it 
must  be  considered  that,  for  this  man- 
ufacturer, volume  has  not  increased  in 
acywhere  near  the  ratio  of  production 
cost. 

1.  Salaries: 

Salesmen 2.0 

Office 5.0 

Administrative 3.0 

2.  Commissions 5.0 

3.  Office  expense: 

Supplies 1.0 

Telephone,    telegraph,    and 

postage 0.5 

4.  Traveling  expense 1.5 

5.  Advertising 1 .0 

Total  selling  costs 19 . 0 


TOTAL  COSTS  OF  DOING  BUSI- 
NESS, IN  DOLLARS  AND  CENTS, 
OF  A  MANUFACTURER  OF  BUILD- 
ING M.\TERL\LS 
(Total  Gross  Sales  $104,703.36) 
As  a  glance  at  the  table  below  will 
show  you,  this  manufacturer  has  his  costs 
under  close  control — he  knows  to  the 
penny  .vhat  it  costs  him  to  do  business. 
The  concern  operates  in  the  Middle  West 
and  the  specialty  building  materials  it 
manufactures  are  sold  entirely  on  com- 
mission. Note  that  the  general  man- 
ager's salary  is  low.  This  is  because  he  is 
a  stockholder  and  prefers  to  take  divi- 
dends instead  of  a  large  salary. 

1.  Cost  of  collections $      89.72 

2.  Commissions  on  sales. .. .        106.42 

3.  Insurance 358.66 

4.  Discounts  taken  by  cus- 

tomers      1,013.14 

5.  Express  and  freight 1,491.58 

6.  Teaming 624.00 

7.  Interest  paid 1,063.39 

8.  Office  stationery 201.32 

9.  Telephone  and  telegraph .        267.27 

10.  Advertising 114.88 

11.  Rent    of    demonstration 

space 25.00 

12.  Power,  light,  and  general 

expense 2,471.67 

13.  Shop  labor 24,939.93 

14.  Office  salaries 4.142.75 

15.  General  manager's  salary     1,875.00 

16.  Bad  debts 171.58 

Total    cost    of    doing 

business $38,956.3; 


A    SCHOOL-FURNITURE    MANU- 
FACTURER 
(Annual  Sales  About  $170,000) 
While  sales  costs  in  this  instance  ap- 
pear very  low,  it  must  be  considered  that 
this  manufacturer's  policy  is  to  allow  the 
production  department  to  assume  a  hea^■y 
share    of    all    expenses    connected    with 
doing  business — another  argument  for  a 
standardization   of   manufacturers'  cost 
of  selling,  some  will  say. 

1.  Administrative  salaries 0.95 

2.  Commis&jons 0.8Q 

3.  Traveling Q  .01 

4.  Collections  imd  credits 0.10 

5.  Advertising 1.30 

Total  sailing  costs 3 .07 


119 


MANUFACTURER  -  WHOLESALER 

COSTS 
(Annual  Sales  More  Than  $1,000,000) 
All  the  cost  figures  that  follow  apply  to 
concerns  in  the  different  lines  doing  an 
annual  business  of  more  than  $1,000,000 
each.  Only  firms  doing  a  business  of  this 
eize  were  considered  in  the  exhaustive 
investigation  involved  in  securing  these 
cost  figures,  and  all  the  wholesalers  con- 
sidered also  are  manufacturers.  Total 
costs  of  doing  business  in  five  lines  are 
given  in  this  and  the  four  following 
tables,  thus  giving  you  a  comprehensive 
idea  of  how  selling  costs  in  these  lines 
compare  with  total  costs  of  doing  busi- 
ness. These  figures  are  averages  of  the 
costs  reported  by  114  representative 
concerns  in  the  various  lines. 


DRUGS 

Indicated  Typical  Costs 

1 .  Selling  expense 4.1 

2.  Administrative    salaries    and 

wages 3 .  S 

3.  Rent 2.0 

4.  Light,  heat,  and  power 0.1 

5.  Packing  and  shipping 0.7 

6.  Insurance  and  taxes 0.4 

7.  Office  expense 0.3 

8.  Bad  debts 0.6 

9.  Advertising 0.4 

10.     General  expense 2.2 

Total  costs 14.6 

CLOTHING 

Indicated  Typical  Costs 

1.  Selling  expense CO 

2.  Administrative    salaries    and 

wages 4.0 

3.  Rent 1.2 

4.  Light,  heat,  and  power 0.3 

5.  Packing  and  shipping 0.4 

6.  Insurance  and  taxes 0.4 

7.  Office  expense 0.3 

8.  Bad  debts 1.2 

9.  Advertising 2.0 

10.     General  expense 1.4 

Total  costs 17.8 


HARDWARE 

Indicated  Typical  Costs 

1.  Selling  expense 6.4 

2.  Administrative 7.9 

3.  Rent 1.0 

4.  Light,  heat,  and  power 0.2 

5.  Packing  and  shipping 1 .0 

6.  Insurance  and  taxes 0.7 

7.  Office  expense 0.8 

8.  Bad  debts 1.1 

9.  Advertising 0.7 

10.     General  expense 3.7 

Total  costs 23.5 


GROCERIES 

Indicated  Typical  Costs 

1.  Selling  expense 3.1 

2.  Administrative 3.0 

3.  Rent 0.4 

4.  Light,  heat,  and  power 0.1 

5.  Packing  and  shipping 0.5 

6.  Insurance  and  taxes 0.4 

7.  Office  expense 0.3 

8.  Bad  debts 0.7 

9.  Advertising 0.4 

10.     General  expense 1.6 

Total  costs 10.3 


SHOES 

Indicated  Typical  Costs 

1 .  Selling  expense 4.9 

2.  Administrative    salaries    and 

wages 3.2 

3.  Rent 0.6 

4.  Light,  heat,  and  power 0.2 

5.  Packing  and  shipping 1.1 

6.  Insurance  and  taxes 0.6 

7.  Office  expense 0.5 

8.  Bad  debts 1.6 

9.  Advertising 0.4 

10.     General  expense 2.7 

Total  costs 15.8 


120 


TESTED  SALES  ACCOUNTING  121 


A  WIRE-CABLE    MANUFACTURER  A  THIRD  NOVELTY  MANU- 

(Annual  Sales  About  8450,000)  FACTURER 

Selling  expense  with  this  manufacturer  (Annual  Sales  About  $150,000) 

is  not  as  high  as  an  equal  sales  volume  in  These  figures  from  a  western  novelty 

some    other  lines   would    mean,   it   was  house  show  the  apparently  strange  item 

found.     This  perhaps  is  due  to  the  fact  of  8%  for  administrative  salaries.  When 

that  much  of  his  business  is  on  long-time  it  is  considered,  however,  that  this  manu- 

contract  basis  and  a  large  force  of  sales-  facturer  does  his  business  by  mail  and 

men  is  not  required.     However,  the  staff  that  the  item  represents  the  salaries  of 

he  has  is  extremely  well  paid,  and  liberal  sales  correspondents,   the  high  figure  ii 

traveling  expenses  are  allowed.  explained. 

1.  Salaries:  1.     Salaries: 

Salesmen 1.5  Office 1.0 

OfiBce 1.0  Administrative 8.0 

2.  Office  supplies 1.0  2.     OfiBce  supplies 0.5 

3.  Insurance  and  taxes 1.0  3.     Insurance  and  taxes 0.5 

4.  Traveling  expense 2.0  4.     Heat  and  light 1.0 

5.  Shipping 0.5  5.     Traveling 0.5 

6.  Advertising 1.0  6.     Advertising 0.5 

Total  selling  costs 8.0  Total  selling  costs 12.0 


One  shoe  manufacturer  who  claims  a  cost  lower  than 
the  average  in  his  line  says  he  has  secured  this  result 
solely  through  his  careful  watching  of  costs. 

*'We  pay  strict  attention  to  our  costs  and  in  spite  of 
the  fact  that  we  charge  our  expense  on  a  more  rigorous 
basis  than  many  houses,  our  costs  apparently  are  lower 
than  most.  We  charge  interest  on  everything.  Our 
cash  discount  is  charged  to  expense.  If  an  invoice  is 
held  up  even  two  days  for  payment  we  charge  interest 
on  it.  Each  of  our  five  branches  is  allotted  a  certain  sum 
for  expenses  and  interest  is  charged  on  it  just  as  though 
the  amounts  were  borrowed  from  outside  sources. 
We  also  charge  interest   on   our  entire   investment. 

"We  are,  however,  hberal  with  the  members  of  our 
sales  force.  We  want  them  to  live  well,  and  we  are 
anxious  for  them  to  earn  more  so  we  can  pay  them 
more.     Even  so,  our  selling  costs  are  considered  low." 

The  policy  of  this  concern  is  to  work  for  a  large 
volume  at  a  low  profit  rather  than  a  high  profit  on  a 
small  volume.  This  manufacturer  points  out  that  a 
competent  salesman  is  the  most  profitable  sort  of 
investment,  and  that  if  he  can  be  made  to  produce  big 
returns,  the  percentage  cost  of  maintaining  him  may 


122  HAMMERING  SALES  COSTS  DOWN 


65  WOMEN'S  UNDERWEAR  A   BOX   MANUFACTURER 

MANUFACTURERS  (Annual  Sales  About  8325.000) 

(Average  Annual  Sales  About  $225,000)  f^jg  concern  makes  boxes  and  it  sells 

The  following  are  on  the  averages  of  them  direct  to  consumers.     Note  that 

selling  costs  reported  by  sixty-five  com-  traveling  expense  was  the  heaviest  charge 

panies     making     women's     underwear.  in  the  selling  cost.     This  concern  con- 

These   costs   were   obtained   through   a  sidered  that  it  had  its  costa  under  at 

government  investigation.    All  percent-  least  fair  control, 

ages    are     based    on    total    gross    sales,  j      Salaries: 

which  averaged  $225,000.     Location  of  Salesmen 0.54 

plant  was  not  considered.  Office 0.31 

1.  Salaries:  Administrative 0 .73 

Salesmen 1.47       2.     Rent 0.15 

Administrative 0.71        3.     Commissions 1 .45 

2.  Rent 0 .43  4.     Office  expense: 

3.  Commissions  and  traveling  ex-  Supplies 0 .09 

penses 3 .82  Telegraph,    telephone   and 

4.  Insurance  and  taxes 0.13  postage 0.47 

5      Shipping 0.32        5.     Traveling  expense 2.43 

6.  Warehouse 0.29        6.     Warehouse 0.45 

7.  Interest  and  depreciation 0.82       7.     Advertising 1.00 

8.  Advertising 0 .29  

Total  selling  costs 8  .28  Total  selling  costs 7 .62 


be  held  very  low,  no  matter  how  large  a  salary  he 
receives.  In  keeping  tab  on  costs  this  man  receiyes  a 
monthly  statement  of  all  money  paid  out  by  him  for 
any  purpose.  These  expenses  in  dollars  and  cents  are 
recorded  in  a  separate  account  book  so  he  can  tell  at  a 
glance  whether  expenses  are  higher  or  lower  than  the 
previous  month,  and  how  they  compare  with  the  same 
month  of  the  previous  year. 

One  wholesaler  says  that  his  cost  of  doing  business 
has  been  increasing  steadily  for  the  last  15  years. 
The  greatest  increase,  he  thinks,  has  come  through  the 
lavish  entertainment  of  out-of-town  buyers  who  visit 
his  sales  rooms.  Increased  traveUng  expenses  also  are 
in  a  measure  responsible  for  the  rise. 

Among  other  reasons  assigned  by  this  man  for 
increasing  costs  are  steady  rises  in  rental  charges,  the 
generally  recognized  tendency  of  many  dealers  to  order 
oftener  and  in  smaller  lots,  and  the  difficulty  of  ob- 
taining goods  which  sometimes  is  encountered. 

Rents,  he  points  out,  increase  whether  the  property 
is  actually  rented  or  owned  by  the  wholesaler.    Re- 


TESTED  SALES  ACCOUNTING  J  23 


A   MANUFACTURER  OF  A       SMALI-ER       FOOD-PRODUCTS 

UPHOLSTERED   FURNITURE  MANUFACTURER 

(Annual  Sales  About  $150,000)  (Annual  Sales  About  $100,000) 

Thisisa  proaporousbutsmallfurniturc  AdvertisinR  is  larRcly  depended  upon 

manufacturinp;    concern   in    the    Middle  to  sell  this  manufacturer's  product,  as  it 

West.     Commissions  bulk  large  and  ad-  is   evident.      Note    (1)    that   bad    debts 

vertising  al.so  is  a  heavy  item  with  it.  might  perhaps  be  reduced,  and  (2)  that 

It  is  probable,  however,  that  close  in-  interest  and  depreciation  again  indicate 

vestigation  into  its  .selling  methods  might  the  perishable  type  of  the  product  made, 

point   ways   to   lower   the   selling   cost,  j      Salaries" 

which  apparently  is  too  high.  '  Salesmen 0 .50 

1.  Administrative  salaries 0.5  Office 0.50 

2.  Commissions 7.5  2.     Office  expense: 

3.  Office  expense 1 .0  Supplies 0.33 

4.  Bad  debts 0.5  Telephone,  telegraph,  and 

5.  Collections  and  credits 1 .0  postage 0.20 

6.  Traveling 2.0        3.     Bad  debts 1.00 

7.  Interest  and  depreciation 2.0  4.     Interest  and  depreciation.  ..  .     1.18 

8.  Advertising 2.0        5.     Advertising 3 .00 

Total  selling  costs 16 .5  Total  selling  costs 5.71 


newals  of  leases,  he  declares,  almost  always  are  made 
at  a  higher  figm-e,  and  where  the  property  is  owned 
by  the  concern  there  is  a  constantly  increasing  cost 
of  maintenance. 

One  concern  which  manufactures  an  automobile 
accessory  reports  that  while  selhng  costs  have  risen 
rapidly  with  it,  this  increase  has  been  largely  offset  by 
increased  sales.  This  manufacturer  bases  his  costs  on 
percentages  of  total  gross  sales.  Here  is  the  way  he 
figures  them  for  most  effective  use: 

Total  sales 100^^ 

Total  costs  (sales  and  production) 65% 

Gross  profit 35% 

Branch  expense 5% 

Administrative  and  general  expense 5% 

Advertising 2% 

Royalties 1% 

Total 13% 

Profit  from  operation 22% 

Miscellaneous  income .21% 

Total 22.21% 

Special  taxes  deducted 10 % 

Net  profit  to  balance  sheet 12.21% 


124  HAMMERING  SALES  COSTS  DOWN 


A    MANUFACTURER    OF    WATER  A  SHOE  MANUFACTURER 
FILTERS  (Annual  Sales  About  $2,650,000) 
(Annual  Sales  About  $142,000)  jj,  the  Middle  West  one  shoe  manu- 
This  concern,   which   manufactures   a  facturer's     books     show     the     following 
heavy  hardware  specialty,  considered  its  selling  costs.    Commissions  paid  to  sales- 
selling   cost   large.      The    company   dis-  men  here  again  are  the  big  item.      In- 
tributes  through  a  number  of  channels  creased     volume     has    cut    this    manu- 
in  addition  to  retail  hardware  stores.  facturer's  costs  during  the  past  five  years. 

1.  Salaries:  1.     Salaries: 

Salesmen 0.6  Office 0.5 

Office 4.4  Administrative 0.4 

2.  Rent 1.1        2.     Commissions 5.4 

3.  Commissions 0.4  3.     Office  expense: 

4.  Office  expense:  Supplies 1 .44 

Supplies 0.2  Telephone,     telegraph    and 

Telephone,    telegraph,    and  postage 0.20 

postage 0.5        4.     Bad  debts 0.20 

5.  Heat  and  light 0.4        5.     Collections  and  credits 0.07 

6.  Shipping 2.0        6.     Shipping 0.20 

7.  Advertising 0.9        7.     Advertising 0.40 

Total  selling  costs 10.5  Total  selling  costs 8.81 


Up  to  a  certain  point  the  tendency  of  retailers  to 
order  in  smaller  quantities  is  considered  an  indication 
of  better  retailing,  this  man  recognizes,  but  he  points 
out  that  when  merchants  were  more  inclined  to  place 
orders  for  several  months'  requirements,  the  orders 
usually  could  be  handled  by  the  manufacturer  or  whole- 
saler at  one  shipment.  Now,  however,  many  mer- 
chants order  only  one  month's  supply  at  a  time.  This 
means  smaller  shipments,  and  has  in  some  depart- 
ments necessitated  quadrupling  the  clerical  force 
necessary  to  handle  orders. 

Difficulty  in  obtaining  raw  materials  has  had  a 
direct  effect  upon  selhng  costs,  according  to  one  manu- 
facturer. In  one  instance,  for  example,  only  one  fourth 
of  one  order  could  be  shipped  from  stock.  Material 
for  the  rest  had  to  be  back-ordered — that  is  the  part 
of  the  order  remaining  unfilled  was  held  back  in  the 
files  until  more  goods  came  in.  Before  this  order  was 
shipped  complete,  four  back  orders  had  been  placed, 
necessitating  four  complete  divisions  and  handlings  of 
the  original  order  by  the  clerical  force.  This  additional 
expense  is  one  of  the  causes  of  higher  costs. 


TESTED  SALES  ACCOUNTING  125 


ANOTHER  BOX   MANUFACTURER  ANOTHER  SHOE  MANUFACTURER 

(Annual  Sales  About  $25,000)  (Annual  Sales  About  $650,000) 

This  concern  reported  an  increase  of  Commissions  form  the  bulk  of  this  shoe 

1  %  in  the  cost  of  selling  over  the  previous  manufacturer's     selling     expense.        He 

year.    Small  volume  here  apparently  is  a  operates  in  the  South.     Perhaps  there  is 

factor  in  a  higher  percentage  of  sales  evidence  here  of  the  wide  range  of  dis- 

expense.  crepancy    found   in    what   items    manu- 

1.  Salesmen's  salaries 2.0  facturers  charge  into  the  sales  cost,  in 

2.  Commissions                                       1  0  *"^    '^'^*'   t'"it    the   interest   and    depre- 

3.  OflSce  expense:' ciation   item   is   allowed   to   count    1  % 

Supplies  .    '. 0  5  against  sales  cost. 

Telephone,    telegraph,    and  1.     Commissions 6 .50 

postage 0.5  2.     OflBcc  expense: 

4.  Insurance  and  taxes 1 .0  Supplies 0.25 

5.  Traveling  expense 1 .0  Telephone,    telegraph,    and 

6.  Shipping 2.0  postage 0 .33 

7.  Warehouse 1.0       3.     Interest  and  depreciation 1 .00 

8.  Interest  and  depreciation 1 .0       4.     Advertising 1 .00 

9.  Advertising 1.5  

Total  selling  costs 11.5  Total  selling  costs 9 .08 


Another  instance  illustrating  how  lack  of  raw 
material  may  affect  selling  costs  and  methods  is  told 
by  a  manufacturer  of  school  furniture.  This  manu- 
facturer sells  his  product  on  long-time  contracts. 

He  found  himself  forced  to  buy  materials  at  greatly 
increased  prices  in  order  to  deliver  on  contracts  signed 
two  or  three  years  before.  At  the  same  time  he  was 
forced  on  new  orders  to  meet  the  competition  of  houses 
which  were  fortunate  or  foresighted  enough  to  have  a 
large  supply  of  raw  material  on  hand. 

To  meet  this  costly  condition  he  took  all  his  sales- 
men off  the  road  and  confined  his  sales  efforts  to  the 
"by  mail"  variety.  His  total  sales  for  the  year  fell  off 
15%  but  he  believes  he  made  money  on  the  switch. 

Another  example  of  how  changing  conditions  dis- 
rupted a  sales  force  is  shown  in  the  experience  of  a 
manufacturer  of  musical  instruments.  This  man 
ordinarily  supphes  a  list  of  wholesale  customers.  He 
heard  of  a  very  large  order  which  w^as  about  to  be  placed 
by  a  foreign  purchaser  through  a  New  York  banking 
house.  Jumping  on  a  train  he  went  to  New  York  and 
came  back  with  an  order  which  kept  his  factory  busy 
for  six  months,  and  his  selling  cost  for  the  entire  six 


126         HAMMERING  SALES  COSTS  DOWN 

months  following  amounted  only  to  the  expense  of  the 
manufacturer's  trip  to  New  York. 

"Costs  are  rising  steadily,"  said  the  manufacturer 
of  a  line  of  leather  goods.  "Our  production  costs  have 
increased  and  our  selling  costs  are  also  higher  because 
higher  prices  have  made  it  harder  to  sell  goods. 
-  "Our  selHng  expense  is  about  10%.  Some  of  our 
salesmen  sell  on  a  straight  10%  commission.  Others 
we  pay  a  salary  and  a  bonus  which  amounts  in  all  to 
about  10%.  And  it  may  be  necessary  for  us  to  advance 
them  to  an  11%  or  12%  basis  before  long." 

Standardization  of  product  is  another  effective 
method  in  reducing  selling  cost  to  a  minimum,  accord- 
ing to  the  manager  of  an  automobile-accessory  firm 
which  is  located  in  the  Middle  West. 

This  firm  was  started  about  10  years  ago  by  three 
men  who  had  held  subordinate  positions  in  a  similar 
firm  in  another  state.  Its  total  capital  was  less  than 
$200,000  and  the  first  two  years  it  lost  $110,000  through 
the  unwise  extension  of  credit.  Three  of  the  automobile 
concerns  they  had  been  supplying  failed,  and  the 
creditors  got  nothing  out  of  the  wrecks. 

Much  of  the  firm's  product  was  distributed  by  a 
nationally  known  electrical  manufactiu-ing  and  jobbing 
house.  The  result  was  thousands  of  small  orders, 
many  of  which  called  for  special  features  requiring 
costly  individual  treatment. 

It  was  not  long  before  the  members  of  the  firm 
reaUzed  that  if  this  poUcy  were  allowed  to  continue  they 
would  be  limited  not  only  as  to  the  possible  amount 
of  output,  but  would  also  lose  money  in  attempting  to 
cater  to  the  whims  of  small  buyers.  It  was  then  that 
the  entire  plant  was  remodeled  and  equipped  to  turn 
out  large  quantities  of  only  one  style  of  accessory. 
The  plant  was  standardized  all  through. 

With  this  equipment  installed  the  firm  went  after 
and  secured  big  contracts  from  three  of  the  largest 


TESTED  SALES  ACCOUNTING  127 

automobile  manufacturers  of  the  country.  Orders 
from  jobbers  were  discouraged  or  turned  down  flatly. 

Since  the  adoption  of  this  pohcy  the  company  has 
increased  its  capital  to  more  than  $1,000,000,  and  cut 
its  sales  costs  more  than  20%. 

These  instances  serve  to  supply  a  bird's-eye  view 
of  some  of  the  cost-of-selhng  problems  manufacturers 
and  wholesalers  are  facing  today.  These  problems 
are  difficult,  it  cannot  be  denied,  but  they  are  not 
impossible  of  solution.  Given  the  proper  sort  of  treat- 
ment they  will  respond,  slowly  it  may  be,  but  surely, 
nevertheless. 


REDUCING  COSTS  WITHOUT  LOSING 
SELLING  POWER 

FORCED  by  the  loss  of  several  salesmen,  and  by 
the  necessity  of  paying  higher  salaries  and 
traveling  expenses  all  around,  a  soap  manu- 
facturer hit  upon  the  idea  of  using  a  portfolio  as  a 
"silent  salesman."  His  plan  not  only  reduced  his 
selling  cost  substantially  but  actually  increased  business 
48%  within  two  years.  It  involved  an  additional 
investment  of  only  $1,800,  it  may  be  noted. 

This  portfolio  is  of  the  looseleaf  style,  leather- 
covered,  and  Sl^  by  11  inches,  letter  size.  It  is  sent 
out  in  reply  to  all  new  inquiries. 

An  original  order  for  one  barrel  of  soap  from  one 
of  the  country's  largest  concerns  strikes  the  eye  of  the 
prospect  as  he  opens  the  folder.  This  is  followed  by 
original  orders  from  many  other  widely  known  con- 
cerns. These  orders  were  of  use  only  as  records  so 
they  were  put  to  work  selhng  more  soap,  and  they 
form  the  best  type  of  testimonial,  it  is  said. 

In  the  folio  there  also  is  a  page  in  colors  of  the 
product  and  its  container.  These  photographs  show 
the  prospect  exactly  what  he  will  get  and  tell  the  story 
at  a  glance. 

Then  comes  the  selling  "talk."  This  stresses  the 
points  of  economy,  sanitation,  and  service-  The 
contract  plan  under  which  the  product  is  sold  is 
minutely  described.  There  also  is  a  price  card  and  an 
order  blank  inserted.    A  table  of  contents  of  each  foho 

158 


REDUCING  SALES  COSTS  WISELY  L50 

is  kept  on  file  in  the  office  so  an  original  order  can  be 
recovered  quickly  if  it  is  wanted. 
When  the  folio  is  sent  out  this  letter  goes  with  it : 
Dear  Sir: 

We  are  sending  you  our  "Silent  Salesman," 
silent  because  he  is  both  deaf  and  dumb. 

He  comes  with  the  evidence  you  want. 

Please  give  him  a  hearing  and  send  him 
home  rejoicing. 

Yours  very  truly. 

If  no  order  is  forthcoming  within  two  weeks  the 
following  letter  is  sent: 

Dear  Sir: 

The  father  of  our  "Silent  Salesman."  is 
wondering  what  his  son  has  done  to  merit  you 
holding  him  under  duress. 

Why  has  he  failed  to  make  good? 

Won't  you  please  "talk"  to  him  again? 
Yours  very  truly. 

Often  this  letter  brings  the  order,  but  if  it  does  not 
this  one  goes  out: 

Dear  Sir: 

Lost,  strayed,  or  kidnapped. 

Our  "Silent  Salesman"  when  last  seen  in 

your  vicinity  wore  flexible  leather  covers. 
Not  being  able  to  respond  to  his  name  (he 

is  deaf  and  dumb  you  know)  he  is  plainly 

labeled  with  gold  letters,  "Our  Silent 

Salesman . " 

Yours  very  truly. 

If  this  letter  does  not  bring  the  desired  result  the 
telephone  or  telegraph  is  used  in  a  final  effort  to  get 
the  business. 

This  successful  method  of  reducing  costs  is  the  way 
one  concern  has  taken  to  meet  a  situation  which 
appears  to  be  growing  more  serious  year  by  year.  The 
cost  figures  on  pages  116  to  125,  from  widely  different 


160         HAMMERING  SALES  COSTS  DOWN 

lines  of  business,  indicate  clearly  the  vital  bearing  of 
the  items  of  salesmen's  salaries  and  expenses  to  the 
selling  cost,  and  emphasize  the  value  of  plans  which 
help  to  reduce  them. 

THESE  THREE  WAYS  TO  CUT  DOWN  SELLING  COSTS  HAAT5 
WORKED  OUT  WELL  FOR  MANY  CONCERNS 

Three  ways  of  cutting  down  the  rising  cost  of  sales- 
men, which  investigation  showed  to  be  in  widespread 
use  among  progressive  manufacturers  and  wholesalers, 
are  discussed  in  this  section.  These  are:  (1)  Better 
plans  for  paying  salesmen;  (2)  better  methods  of  dis- 
playing samples ;  and,  (3)  better  methods  of  preparing 
customers  for  the  salesman's  visit — that  is,  stage- 
managing  the  salesman's  visit  so  the  customer  is  well 
warmed  up  to  the  buying  point  before  the  salesman 
actually  makes  his  entrance. 

With  the  first  general  policy  there  are  several 
factors  to  be  considered.  Wliether  the  salesmen  shall 
be  paid  a  straight  salary,  a  salary  and  commission, 
straight  commission,  a  percentage  of  the  net  profit  on 
his  sales,  or  some  form  of  bonus  depends  largely, 
investigation  reveales,  on  the  type  of  the  product 
and  the  method  of  distribution.  What  is  a  successful 
method  for  one  concern  may  be  entirely  unsuitable 
for  another,  it  is  found. 

Here  is  the  experience  of  one  wholesale  concern. 
This  house  found  that  its  sales  costs  were  1%  higher 
than  it  considered  they  should  be — that  its  salesmen, 
instead  of  consuming  5%  of  the  total  gross  sales,  were 
getting  6%.  The  annual  sales  of  this  concern  were 
$6,000,000  and  the  80  salesmen  cost  $60,000  more 
than  it  was  thought  they  should. 

It  was  discovered  that  the  reason  for  this  ''overage" 
was  that  the  salesmen  were  paid  on  a  5%  commission 
basis.  They  were  allowed  to  draw  monthly  an  amount 
sufficient   to   cover   their   traveling   expenses   plus  a 


REDUCING  SALES  COSTS  WISELY  161 

certain  amount  for  personal  use.  The  amount  for 
personal  use  was  determined  on  a  basis  of  the  estimated 
earning  capacity  of  the  salesman.  It  was  charged 
against  his  commission  account  and  if  his  commissions 
exceeded  his  draw  the  salesman  received  the  excess 
at  the  end  of  the  season. 

This  arrangement  was  one-sided  because  if  the  sales- 
man's draw  exceeded  his  commissions  it  was  difficult 
for  the  house  to  obtain  a  refund  of  the  difference. 
It  was  the  experience  of  this  house  that  90%  of  its 
men  failed  to  earn  their  drawing  account.  The  in- 
dividual losses  were  small,  but  the  aggregate  summed 
up  to  1%  of  the  total  gross  sales. 

Under  this  pohcy,  which  protected  the  salesmen  but 
not  the  house,  the  sales  costs  could  not  be  cut.  As- 
suming that  5%  was  a  fair  remuneration  for  seUing 
its  goods,  why  should  it  pay  one  man  more  than 
another,  the  concern  asked?  The  question  was  an- 
swered by  putting  all  the  salesmen  on  a  strictly  com- 
mission basis  without  any  drawing  account.  The 
salesmen  who  were  not  producing  enough  business  were 
dismissed  at  the  end  of  the  season.  Then  the  sales 
manager  sought  out  new  men  to  work  on  the  com- 
mission basis — not  men  who  were  recognized  expert 
salesmen  and  would  not  work  without  an  attractive 
salary  being  guaranteed — but  salesmen  who  were 
young  and  ambitious  and  who  appreciated  an  oppor- 
tunity to  develop  in  a  growing  organization.  He  told 
the  old  salesmen  of  the  company  about  the  new  plan, 
appealing  to  them  on  a  personal  basis  to  help  him  out. 

The  sales  manager,  however,  had  a  hard  problem  to 
get  the  old  salesmen  to  agree  to  the  new  policy.  Most 
of  them  could  not  do  without  a  drawing  account,  they 
declared.  All  but  one  man,  however,  finally  agreed 
to  the  new  payment  plan.  This  salesman  had  a 
contract  which  ran  for  two  years  and  nothing  could 
be  done  with  him  until  it  expired.     A  very  few  of  the 


162         HAMMERING  SALES  COSTS  DOWN 

men,  although  agreeing  to  it,  were  aggrieved  at  the  new 
policy  and  nursed  their  grievance  until  they  forced 
their  own  withdrawal  from  the  organization. 

It  required  two  years  to  abolish  the  last  of  the 
drawing  accounts  in  that  house,  but  the  sales  manager 
kept  at  it  until  he  had  a  clean  slate.  Both  individual 
and  aggregate  sales  increased  during  the  entire  period. 
This  growth  of  sales  soon  afterward  made  it  possible 
to  cut  the  selhng  commission  from  5%  to  4%  without 
reducing  the  total  earnings  of  the  salesmen. 

Another  house — it  manufactures  food  products — 
met  a  similar  difficulty  by  changing  from  a  straight 
salary  basis  to  a  commission  basis — one  which  prac- 
tically put  the  salesman  into  business  for  himself. 
The  sales  manager  of  this  concern  says  of  the  new  plan : 

"High-class  salesmen,  a  quahty  product,  and  a 
wilHngness  on  the  part  of  the  sales  manager  to  allow 
these  two  to  work  out  their  own  salvation  has  been 
the  secret  of  the  success  of  this  company.  This  policy 
has  kept  our  selling  cost  at  a  minimum  and  has  made 
extensive  advertising  unnecessary.  We  have  been  able 
to  open  new  territories  at  small  expense  against  heavy, 
firmly  estabhshed  competition.  The  salesmen  we  now 
have  are  the  type  that  think  only  in  carload  lots  and 
their  orders  correspond  to  their  thinking. 

**Our  company  employs  men  on  a  commission  basis 
which  practically  puts  them  in  business  for  themselves 
without  necessitating  their  making  a  heavy  capital 
investment.  We  fix  the  price  to  the  salesman  at  a 
figure  which  allows  a  fair  profit  over  the  manufacturing 
cost.  All  goods  are  shipped  f.  o.  b.  the  factory.  The 
salesman  is  at  hberty  to  fix  his  prices  as  he  will.  If 
he  finds  it  necessary  to  shade  the  price  a  Httle  to  land 
a  big  order  he  is  at  Hberty  to  do  so,  but  the  loss  is  his 
own.  There  is  a  good  profit  in  the  fine  for  both  the 
jobber  and  the  retailer  and  the  quality  is  such  that 
the  rate  of  turnover  normally  is  a  rapid  one. 


^^SILENT  SALESMAN"   SAMPLE 
TRUNKS  ARE  READY 

Our  Silent  Salesman  trunks,  with  samples  of  Fall 
styles  In  Stock,  are  now  on  the  road. 

We'll  be  glad  to  route  one  in  to  you  if  you'll  but 
say  the  word — no  expense,  no  obligation. 

This  is  a  most  important  announcement  for 
everyone  who  has  not  purchased  his  complete  line 
of  Fall  and  Winter  styles,  for  those  represented  by 
samples  in  the  trunk  can  be  shipped  at  once  from 
stock.  Fill  your  needs  from  the  styles  you  see 
sampled  here. 

The  trunk  will  be  forwarded  immediately  on 
receipt  of  request — no  delay. 

Ralston  Health  Shoemakers 

Salesmakers  as  well  as  Shoemakers 

Brockton,  Mass.,  Gampello  Station 


Figure  29:  One  shoe  manufacturer  creates  a  demand  for  "Silent 
Salesmen"  sample  trunks  by  sending  trunks  to  dealers,  in  answer  to 
requests  obtained  from  advertisements  in  trade  papers  and  from 
district  advertising.     This   is   one   of  the  trade-paper  advertisements. 

163 


164         HAMMERING  SALES  COSTS  DOWN 

"We  require  no  salesmen's  reports,  unless  you  count 
orders.  They  are  the  only  sort  that  weigh  with  us. 
The  company,  of  course,  keeps  in  close  touch  with  the 
salesmen  by  letter  and  sees  to  it  that  they  keep  work- 
ing, and  it  also  keeps  a  line  on  the  jobbers  to  make 
sure  that  the  goods  turn  rapidly.  The  advertising  of 
the  line  largely  is  in  the  hands  of  jobber  and  retailer. 

"Under  this  system  our  selling  cost  is  reduced 
practically  to  nothing.  A  small  overhead  office  charge 
and  a  small  apportionment  for  advertising  and  traveling 
are  the  only  costs  directly  charged  to  selling." 

HERE'S  A  SALARY-AND-BONUS  PLAN  WHICH  HAS  ELIMINATED 
DISPUTES  AND  SATISFIED  ALL  INVOLVED 

After  a  series  of  experiments,  a  house  which  manu- 
factures a  specialty  retailing  in  drug  and  department 
stores  at  from  SI  to  $5,  has  worked  out  a  salary-and- 
bonus  plan  which  the  sales  manager  beUeves  is  the 
best  one  possible  for  his  concern.  It  has  eliminated 
all  disputes  over  salary  and  at  the  same  time  has  held 
the  selUng  cost  to  a  reasonable  figure. 

Salary  raises  in  this  house  are  automatic.  Salesmen 
are  employed  at  a  salary  not  to  exceed  a  given  per- 
centage of  estimated  sales  in  the  territory  to  which 
they  are  assigned.  When  a  salesman  exceeds  the  fixed 
maximum  of  sales  he  receives  a  5%  commission  on  the 
excess.  The  following  year  the  total  sales  of  the  pre- 
ceding year  become  the  minimum  amount  of  sales 
expected,  and  a  commission  of  5%  is  paid  for  sales  in 
excess  of  this  amount.  The  salary  and  the  commission 
earned  the  first  year  automatically  become  the  regular 
salary  for  the  second  year.  This  arrangement  elimi- 
nates all  salary  dispute  and  rewards  the  ability  and 
energy  of  the  salesmen. 

The  company  does  not  penalize  for  a  salesman's 
failure  to  reach  the  maximum  mark  set,  but  a  minimum 
mark  also  is  established,  and  failure  to  reach  this 


REDUCING  SALES  COSTS  WISELY  165 

minimum  mark  automatically  releases  the  salesman, 
unless  some  very  unusual  business  conditions  exist 
in  his  territory,  and  he  can  prove  it. 

The  amount  of  sales  reasonably  to  be  expected  in 
each  state  is  determined  by  close  investigation  and 
the  point  system  is  used  in  figm-ing  sales.  Let  us  see 
what  this  means. 

If  a  territory  shows  that  $30,000  in  sales  is  possible, 
then  the  company  employs  a  salesman  whose  salary 
and  traveling  expenses  can  be  kept  within  a  certain 
percentage  of  this  amount.  For  example,  if  5%  is  the 
figure,  his  salary  and  traveling  expense  must  not  exceed 
$1,500.  But  if  he  sells  goods  to  the  amount  of  $35,000 
and  keeps  down  expenses  he  is  rewarded  accordingly. 

If  the  bonus  is  5%  on  the  extra  $5,000  of  business  his 
salary,  expenses,  and  commission  for  the  year  would 
amount  to  $1,750,  his  selling  expense  has  been  reduced 
to  91.8%,  and  the  following  year  the  salary  will  be 
$1,750,  with  a"  commission  of  5%  on  all  sales  in  excess 
of  $35,000.  How  this  worked  out  over  a  period  of  six 
years  in  an  actual  instance  is  shown  below: 

Commission 

Required  at  5%  over 

amount  of  Required    Total 

sales  in     Salary  Actual      amount      earned 

territory  sales        of  sales 

First  year $30,000      f  1,500  $35,000       $250         $1,750 

Second  vear $35,000      $1,750  $41,000       $300         $2,050 

Third  year $41,000      $2,050  $45,000       $200         $2,250 

Fourth  year $45,000      $2,250   $44,000        $2,250 

Fifth  year $45,000      $2,250  $54,000       $450         $2,700 

Sixth  year $54,000      $2,700  $58,000       $200         $2,900 

In  applying  this  system  the  bonus  percentage,  of 
course,  is  fixed  so  it  will  not  bring  the  total  of  the  sales- 
man's remuneration  above  the  amount  allotted  to  it  in 
the  total  selling  expense.  In  applying  the  plan,  the 
company  estimates  the  sales  opportunity  in  each  ter- 


166  HAMMERING  SALES  COSTS  DOWN 

ritory,  not  upon  the  gross,  but  upon  the  net  population. 
The  net  population  figure  is  obtained  by  eliminating 
from  the  estimates  certain  classes  not  considered  Hkely 
to  be  purchasers  of  the  product. 

This  plan  has  worked  out  satisfactorily  for  six  years. 
Some  of  the  salesmen  have  not  even  mentioned  raises 
in  salary  in  that  time.  In  some  instances,  owing  to  a 
change  in  territories,  an  increase  not  based  on  the  plan 
has  been  given,  but  the  minimum  sales  standard  always 
has  been  increased  at  the  same  time. 

One  sales  manager  for  a  get-ahead  concern  has 
developed  a  plan  for  paying  salesmen  on  a  basis  of  profits 
earned  by  them  for  the  company. 

"Paying  salesmen  a  commission  on  sales  has  the 
distinct  disadvantage  of  encouraging  price  cutting — 
unless  there  is  a  strict  rule  against  it — and  so  reacting 
unfavorably  on  profit,"  says  this  sales  manager.  ''It 
is  frequently  to  a  salesman's  advantage  to  cut  price  to 
the  limit  to  get  the  business.  This  means  that  plants 
are  overworked,  credits  strained,  and  stocks  depleted. 
Good,  paying  customers  suffer  while  the  factory  takes 
care  of  cheap  business  picked  up  by  salesmen. 

"These  unfavorable  features  have  led  many  firms 
to  pay  their  salesmen  on  a  straight  salary  basis,  plus 
traveling,  living,  and  entertainment  expenses  while  on 
the  road.  The  salary  paid  to  each  salesman  under  this 
method  is,  of  course,  determined  only  periodically.  In 
general  the  amount  depends  not  so  much  upon  the 
actual  profitableness  of  the  salesman's  work,  as  few 
firms  have  methods  of  determining  this  accurately,  but 
rather  upon  the  amount  that  it  was  necessary  to  pay 
in  the  beginning  to  obtain  his  services. 

"Now,  with  the  volume  of  sales  and  the  gross  profits 
fairly  closely  estimated,  a  sales  manager  naturally  de- 
cides on  a  lump  sum  which  he  can  afford  to  spend  for 
salesmen's  salaries,  traveling,  and  entertainment  ex- 
penses.   To  obtain  a  capable  salesman  on  a  salary  basis, 


REDUCING  SALES  COSTS  WISELY  167 

the  minimum  salary  you  must  pay  inevitably  is  greater 
than  the  "  tail-enders "  of  the  sales  force  can  expect — 
that  is,  salesmen  who  fall  below  the  mark  of  average 
efficiency  when  judged  on  the  basis  of  net  profits 
actually  accruing  to  the  company  from  their  sales. 

"In  other  words,  salesmen  who  are  below  the  average 
in  ability  are,  as  a  whole,  overpaid.  On  the  other  hand, 
to  keep  within  the  limits  of  the  amount  available  for 
salesmen's  salaries,  the  men  whose  sales  are  bringing 
the  greatest  profits  to  the  company  are,  more  often 
than  not,  underpaid.  Their  earnings  are  pulled  down 
by  the  too-large  salaries  paid  incompetents.  As  a 
result,  these  men  often  are  lost  to  competing  concerns." 

YOU'LL  AGREE  THAT  ABOUT  EVERY  SITUATION  WHICH  COULD 
ARISE  IS  COVERED  BY  THIS  TESTED  PAYMENT  PLAN 

"Another  disadvantage  encountered  under  the 
straight-salary  method,"  this  manager  says,  *'is  that 
when  a  period  of  depression  comes,  if  expenses  are  to  be 
kept  within  gross  profits  the  sales  force  must  be  cut. 
If  this  is  not  done  the  house  has  to  stand  a  loss.  If  it 
is  done  and  the  period  of  depression  is  followed  by  one 
of  great  prosperity  and  largely  increased  sales, the  sales 
force,  in  order  to  handle  this  increased  business,  must 
be  built  up  with  more  or  less  'green'  men  who  cannot 
handle  the  business  effectively." 

Seeking  for  a  simple  and  a  fair  method,  this  manager 
developed  an  exceptionally  effective  payment  plan, 
the  first  consideration  of  which  was  to  make  all  ex- 
penses bear  a  constant  ratio  to  gross  profits.  There- 
fore, a  certain  percentage  of  the  gross  profits  accruing 
from  the  total  sales  made  by  each  salesman  always  is 
available  to  help  cover  expenses  falling  under  the  heads 
of  salesmen's  salaries  and  entertainment.  This  plan 
gives  the  salesmen  10%  of  gross  profits  on  total  sales, 
with  an  additional  10%  of  the  gross  profits  on  sales  to 
bona-fide  new  customers. 


168  HAMMERING  SALES  COSTS  DOWN 

There  was  a  logical  reason  for  giving  the  additional 
10%  on  sales  made  to  new  accounts,  rather  than  giving 
a  premium  or  a  bonus  for  each  new  customer — it 
made  sure  that  the  new  business  would  lead  to  more 
desirable  results  in  the  long  run. 

A  premium  or  bonus  plan,  it  was  thought,  might 
easily  foster  a  tendency  among  salesmen  to  obtain  the 
largest  number  of  accounts,  no  matter  how  small,  so 
long  as  they  were  large  enough  to  pass  muster  as  new 
individual  accounts.  These  would  carry  a  low  gross 
profit,  especially  if  salesmen  cut  prices  to  get  them. 

Then,  again,  once  they  were  on  the  books  the  sales- 
men would  have  no  great  incentive  to  seciu*e  subsequent 
business  from  the  customers  unless  it  came  easily  and 
brought  big  enough  profits  to  make  the  regular  bonus 
of  10%  worth  while.  But,  with  the  handicap  of  cut 
prices  to  start  with,  it  probably  would  not  be  easy  to 
secure  a  satisfactory  gross  profit  on  sales  to  these 
customers.  Small,  scattered  orders  of  this  sort  also 
would  mean  high  expense  for  work  in  the  clerical 
department,  so  that  they  could  in  no  sense  be  accu- 
rately termed  profitable  new  business. 

On  the  other  hand,  it  is  declared  that  when  the  sales- 
man is  given  an  additional  10%  on  gross  profits 
accruing  on  sales  to  new  accounts,  he  shall  have  every 
incentive  to  secure  a  high  rate  of  gross  profit  on  the 
initial  order,  and  to  work  his  hardest  for  subsequent 
profitable  orders  from  these  new  customers.  The 
tendency  is  all  directed  toward  a  constantly  growing 
number  of  new  accounts,  with  each  carrying  a  satis- 
factory rate  of  gross  profit. 

"From  an  administrative  viewpoint,  perhaps  the 
greatest  advantage  gained  by  adopting  a  current  profit- 
sharing  plan  of  paying  salesmen  is  the  ehmination  of 
the  vexing  problem  of  'raises',"  this  sales  manager  says. 
"The  typical  sales  force  often  is  more  or  less  de- 
moralized by  uncertainty  and  speculation  for  some 


REDUCING  SALES  COSTS  WISELY  169 

time  both  before  and  after  the  regular  'raise'  time. 
Then,  too,  the  straight-salary  method  of  payment 
always  calls  for  a  raise  if  any  change  at  all  is  made. 
Often  a  mediocre  salesman  through  abnormal  con- 
ditions in  his  territory  makes  a  brilliant  showing,  on 
the  basis  of  which  he  demands  a  suitable  increase. 

"If  this  is  forthcoming,  he  usually  settles  back  into 
his  normal,  mediocre  gait  when  he  no  longer  has  luck 
or  favoring  conditions  to  boost  his  showing.  Then, 
in  order  to  avoid  a  constant  net  loss  on  this  man,  the 
sales  manager  either  must  cut  his  salary  or  discharge 
him,  the  former  action  usually  being  practically  as 
effective  a  means  of  losing  him  as  the  latter.  In  either 
event  the  sales  manager  has  cast  unfavorable  reflection 
on  his  own  judgment  in  giving  the  man  a  raise  in  the 
first  place.  Thus,  with  the  salary  plan,  we  find  endless 
efforts  to  match  past  history  and  at  the  same  be  just. 

"Now,  the  most  valuable  feature  of  our  profit-sharing 
plan  lies  in  the  fact  that  normally  it  enables  the  sales 
manager  to  maintain  the  personnel  of  his  sales  force 
practically  intact  through  all  sorts  of  periods. 

"One  of  the  first  essentials  is  that  all  of  the  details 
of  the  plan  be  clearly  presented  to  all  the  members  of 
the  sales  force  at  the  outset.  They  should  be  impressed 
with  the  fact  that  their  interests  and  the  interests  of 
the  company  are  identical;  that  if  they  expect  to 
receive  their  full  share  of  the  profits  secured  in  the 
company's  most  prosperous  times,  they  should  also  be 
wolfing  to  allow  the  proportionate  share  to  remain 
at  least  fairly  constant  in  lean  times." 

This  sales  manager  found  that  the  men  whose  work 
had  been  ineffective  were  impressed  with  the  fact  that 
their  past  ill  success  would  not  affect  their  status  in  the 
least  if  they  could  show  good  results  in  the  future.  They 
do  not  have  to  wait  until  a  set  "pay-raising  time"  to 
reahze  on  better  success,  either,  but  can  cash  in  month 
by  month  and  year  by  year. 


170         HAMMERING  SALES  COSTS  DOWN 

"Also,"  he  continues,  ''if  it  ever  becomes  necessary 
to  cut  down  on  the  sales  force,  the  salesmen  whose 
records  are  least  favorable  will  be  the  first  to  go.  But 
it  will  naturally  be  harder  for  the  lower  grade  salesman 
to  secure  another  position.  Therefore,  the  chances  are 
distinctly  in  favor  of  keeping  the  force  intact  in  hard 
times,  without  allowing  expense  to  exceed  its  proper 
relation  to  gross  profits.  At  the  same  time  good  men 
will  remain  because  they  automatically  receive  their 
full  share  of  what  they  bring  in — and  in  our  organiza- 
tion good  men  rarely  leave  for  other  causes,  we 
have  found." 

WHEN  DECIDING  UPON  THE  RIGHT  PAYMENT  PLAN,  HERE 
ARE  SOME   ROUGH   SPOTS   IT  WILL  PAY   TO   AVOID 

In  working  out  the  general  plan,  each  salesman  is 
given  a  lump  credit  of  from  $200  to  $400  to  start  with. 
This  stands  as  a  perpetual  charge  against  him.  Each 
month  the  percentage  of  gross  profit  on  his  sales,  and 
his  travehng  expenses  are  credited  to  him.  Except 
under  extraordinary  conditions  salesmen  thus  can  draw 
reasonable  amounts  each  month  to  meet  expenses. 

If  an  account  goes  bad  and  is  written  off  after  a 
salesman  has  been  credited  with  his  share  of  the  gross 
profit  which  might  have  been  made  on  it,  this  amount 
is  debited  against  him.  This  provision  protects  the 
company  from  indiscriminate  selling  to  dealers  who 
cannot  or  will  not  pay  their  bill. 

Before  we  leave  the  question  of  better  methods  of 
paying  salesmen,  let  us  consider  one  more  effective  plan 
and  see  how  it  was  applied  by  a  food-products  manu- 
facturer who  markets  his  product  both  in  bulk  and  in 
branded  packages,  and  also  by  a  manufacturer  of  toilet 
preparations  of  many  varieties. 

Since  the  branded  packages  of  the  food  manufacturer 
were  the  most  profitable,  the  scale  of  compensation 
which  was  worked  out  provided  for: 


REDUCING  SALES  COSTS  WISELY  171 

1.  A  uniform  drawing  account  of  $20  a  week. 

2.  A  commission  of  3  cents  a  pound  on  bulk  sales. 

3.  A  commission  of  5  cents  a  pound  on  sales  of 
branded  goods. 

4.  No  commission  on  branded  goods,  however, 
unless  sales  reached  a  certain  number  of  pounds  a  week. 

This  plan  was  effective  for  this  company  because  it 
emphasized  the  firm's  desire  to  give  the  branded  goods 
the  preference  by  allowing  a  high  rate  of  commission 
on  them.  It  goes  a  step  further  in  that  it  tends  to 
prevent  the  salesman  from  selling  the  less  profitable 
line  by  penalizing  him  for  failure  to  sell  enough  of  the 
branded  hnes.  Obviously,  if  a  salesman  neglected  the 
branded  lines  so  that  his  sales  in  them  became  neg- 
hgible,  commissions  would  fall  off,  and,  of  course, 
eventually  his  position  would  be  forfeited. 

This  firm  started  this  plan  to  compensate  its  sales- 
men in  New  York  City.  It  worked  so  well  there  that 
it  was  extended  to  cover  its  city  salesmen  all  over  the 
country,  and  then,  with  modifications,  to  the  road  men. 

It  is  claimed  for  the  plan  that  with  this  firm  it: 

1.  Results  in  greater  sales. 

2.  Results  in  net  profits  bigger  than  the  natural 
percentage  of  increased  sales  would  bring. 

3.  Reduces  friction  between  salesmen  and  exec- 
utives. 

4.  Helps  in  introducing  new  lines. 

5.  Develops  salesmen. 

6.  Gives  the  sales  manager  greater  opportunity  for 
constructive  work. 

7.  Lessens  the  cost  of  (a)  training,  (b)  development, 
(c)  discharging. 

Now  let  us  see  in  detail  how  practically  the  same  plan 
worked  out  with  a  manufacturer  of  toilet  preparations. 


172         HAMMERING  SALES  COSTS  DOWN 

This  concern  carries  1,700  items  on  its  list.  It  has 
branch  offices  in  seven  cities  from  the  Atlantic  to  the 
Pacific.  The  compensation  chart  for  Salesman  De- 
laney,  shown  below,  illustrates  the  plan.  Delaney  is 
a  veteran  city  salesman,  with  a  drawing  account  of 
$35  a  week.  His  weekly  test  figure  is  $140  gross  sales, 
says  the  sales  manager. 

COMPENSATION  CHART  FOR  SALESMAN  DELANEY 

Class  1—50% 

Perfumes,  4-ounce  bottle  at  SI. 50  an  ounce  and  up 

Soap,  at  50  cents  a  cake  and  up 

Talc,  large  size  at  50  cents  a  box  and  up 

Toilet  waters,  6-ounce  bottle  at  SI  a  bottle  and  up 

Group-A  products  at  full  trade  list 

Class  11-40% 

Perfumes,  4-ounce  bottle  at  SI  and  up  to  $1.50 
Soap,  a  cake  at  35  cents  and  up  to  50  cents 
Talc,  large  size  at  35  cents  a  box  and  up  to  50  cents 
Toilet  waters,  6-ounce  bottle  at  75  cents  and  up  to  SI 
Group-B  products  at  10%  discount 

Class  III— 33  1-3% 

Perfumes,  4-ounce  bottle  at  75  cents  and  up  to  $1 

Soap,  a  cake  at  25  cents  and  up  to  35  cents 

Talc,  large  size  at  25  cents  and  up  to  35  cents 

Toilet  waters,  6-ounce  bottle  at  50  cents  and  up  to  75  cents 

Group-C  products  at  1/6  off  trade  list 

Class  IV— 25%, 

Perfumes,  4-ounce  bottle  at  50  cents  and  up  to  75  cents 

Soap,  a  cake  at  16  2/3  cents  and  up  to  25  cents 

Talc,  large  size  at  123^2  cents  and  up  to  25  cents 

Toilet  waters,  6-ounce  bottle  at  33  1/3  cents  and  up  to  50  cents 

Group-D  products  at  20%  discount 

Class  V— 16  2/3% 

Perfumes,  4-ounce  bottle  at  35  cents  and  up  to  50  cents 

Soap,  a  cake  at  93^  cents  and  up  to  123^  cents 

Talc,  small  size  at  10  cents 

Toilet  waters,  6-ounce  bottle  at  25  cents  and  up  to  33  cents 

Group-E  products  at  25%  discount 


REDUCING  SALES  COSTS  WISELY  173 

Class  VI— 10% 

All  perfumes  at  less  than  35  cents  an  ounce 

Soap  at  less  than  93^  cents  a  cake 

All  large-size  talc  at  10  cents 

All  small-size  talc  at  less  than  10  cents 

Toilet  waters  at  less  than  25  cents 

Group-F  products  at  30%  discount 

Delaney  has  a  good  city  territory.  His  expense 
account  includes  only  car  fares  and  modest  entertain- 
ment, and  his  limit  on  this  total  is  set  at  $9  a  week. 

With  a  line  of  1,700  items,  setting  a  percentage  of 
commission  on  each  item  might  make  it  difficult  for  the 
salesman  to  carry  in  his  head  the  commissions  on  more 
than  a  few  items,  unless  there  were  some  arrangement 
like  the  chart.  The  chart  has  proved  easy  to  memorize 
because  it  classifies  trade  discounts  according  to 
price  units  famiUar  to  the  salesmen. 

Needless  to  say,  it  is  in  making  up  the  chart  that  the 
real  work  comes.  This  work  of  charting  must  result 
in  a  schedule  of  commissions  which  will  justify  the 
seven  claims  tabulated  previously. 

Let  us  assume  for  the  moment  that  Delaney,  instead 
of  being  a  veteran,  is  a  newcomer  with  the  firm.  In 
compiling  his  schedule  it  would  be  a  ''model"  or  "no 
exceptions"  schedule,  because  his  weaknesses  would 
not  be  known.  In  other  words,  with  a  beginner  the 
schedule  would  reflect: 

(a)  The  profit  needs 

(b)  The  territorial  needs 

The  moment  we  consider  the  actual  circumstance  of 
Delaney  as  he  is — a  veteran,  and  with  a  veteran's 
strength  and  weaknesses — we  have  a  specific  human 
problem  to  face  and  solve. 

Delaney  always  was  weak  on  selling  toilet  waters 
and  the  really  "fancy"  talcum  powders  retailing  at 
from  75  cents  to  $1.25.     Hence,  we  disregard  actual 


174  HAMMERING  SALES  COSTS  DOWN 

profit  and  put  toilet  waters  and  high-priced  talcums 
up  a  class  or  two  so  that  the  commissions  on  them 
may  be  particularly  attractive  to  him — and  we  balance 
this  by  dropping  into  group  B,  at  a  commission  of  40%, 
several  products  which  would  be,  ordinarily,  from  a 
profit  standpoint  saved  for  Group  A  at  a  50%  com- 
mission, but  which  Delaney  sells  with  such  ease  that 
it  is  sure  that  he  will  not  neglect  them  at  any  price. 

If  the  company  wishes  to  emphasize  the  fact  that  a 
certain  article  is  important  enough  to  be  ''pushed," 
the  article  can  be  put  in  a  pleasingly  high-commission 
group  to  stimulate  the  salesman  by  monetary 
incentive,  and  it  can  also  be  coupled  with  a  product 
which  the  veteran  has  shown  marked  ability  to  sell,  and 
which  he  practically  sells  without  effort. 

THE  COMMON  TENDENCY  TO  MAKE  "LEAST  RESISTANCE" 
SALES  IS  OVERCOME  IN  AN  EXTREMELY  EFFECTIVE  WAY 

For  example,  let  us  consider  all  25-cent  retail  shaving 
soaps,  powders,  and  pastes  to  which  Delaney  (because 
of  his  ingrained  belief  that  they  are  ''dudes'  delights") 
gives  only  passing  attention.  This  is  a  serious  type  of 
mental  kink.  By  putting  these  25-cent  articles  for  a 
year  in  a  high  class  and  coupling  the  "barber's  bars" 
and  bulk  shaving  soaps  sold  by  the  pound  in  such  a 
manner  that  the  salesman  gets  an  extra  2  3/^%  on  his 
bulk  business  if  he  sells  a  stated  quantity  or  proportion 
of  25-cent  shaving  preparations  as  well,  his  strong 
point  is  used  to  overthrow  his  weak  one. 

In  this  way  the  company  does  away  with  the  ten- 
dency on  the  part  of  salesmen  to  sell  along  the  line  of 
least  resistance;  for  "big"  money  grows  just  outside 
the  beaten  paths.  Instead  of  simply  elaborating  on  the 
idea — which,  with  the  suggestions  given,  any  good 
sales  manager  can  adapt  to  his  own  needs — let  us  see 
how  the  sales  manager  of  this  company  answered 
several  questions  about  his  methods. 


REDUCING  SALES  COSTS  WISELY  175 

Question  1 :  Is  not  the  system  so  complicated  that 
salesmen  will  resent  it? 

Answer:  In  any  event  it  must  be  less  complicated 
than  a  catalog  of  the  selfsame  products.  If  it  is  fairly 
constructed,  it  must  appeal  to  the  salesman's  self- 
interest;  if  it  does  that  he  will  not  resent  an  efTort 
of  the  company  to  increase  his  income. 

Question  2:  Will  not  the  salesmen  compare  their 
charts  with  one  another  and,  discovering  differences, 
brand  the  entire  system  as  unfair? 

Answer:  Of  course,  they  will  compare  charts  and 
discover  the  differences,  but  it  is  part  of  the  system  to 
sell  each  salesman  his  own  base  of  compensation.  If 
this  is  done  properly  and  the  system  is  fair,  the  sales- 
man will  have  his  objections  killed  before  he  makes 
such  comparison  with  the  charts  of  others. 

Question  3:  Will  it  not  increase  overhead  expense 
to  figure  these  comphcated  compensations? 

Answer:  Yes,  but  it  will  not  increase  ''dead  expense," 
for  few  more  valuable  analyses  of  a  salesman's  work 
can  be  made  than  these  weekly  or  monthly  statistics. 
Since  the  chart  is  the  diagram  of  a  salesman's  strength 
and  weakness,  the  tabulations  are  necessary  in  order 
that  the  sales  manager  may  be  in  a  position  to  help  him. 

Question  4 :  How  much  clerical  expense  does  figuring 
the  compensations  require? 

Answer:  One  clerk  should  be  able  to  tabulate,  by  a 
"formula  key  chart,"  at  least  20  men's  orders.  Our  fig- 
ures indicate  a  yearly  clerical  cost  per  salesman  of  $30. 

Question  5:  What  attitude  should  be  adopted  if  in 
a  very  few  months  a  salesman  takes  advantages  of  a 
high  commission  on  a  line  he  previously  neglected  and 
doubles  his  earnings,  although  neglecting  some  equally 
valuable  line  at  a  lower  commission? 


176         HAMMERING  SALES  COSTS  DOWN 

Answer:  Be  pleased  at  a  good  proof  of  the  effective- 
ness of  the  system  in  correcting  faults.  Call  the  sales- 
man to  account  for  dropping  off  on  the  second  valuable 
line,  pointing  out  that  he  is  regarded  as  a  fixture  with 
the  firm  and  such  glaring  omissions  are  like  rotten  spots 
in  a  good  apple.  Let  him  know  another  year  is  coming. 
Do  not  alter  commission  on  his  specialty. 

Question  6 :  Is  it  necessary  to  make  a  different  chart 
for  each  salesman?  Cannot  one  model  chart  with 
slight  modifications  apply  to  all? 

Answer:  It  is  essential  to  make  only  as  many  model 
charts  as  there  are  clean-cut  differences  in  the  type  of 
different  groups  of  salesmen's  work.  These  model 
charts  rarely  are  guides,  however.  "Ready  made" 
compensation  plans  have  been  tried  times  innumerable, 
but  because  salesmen  are  human  they  often  fall  far  short 
of  the  mark.  The  new  idea  in  compensation  is  not  to 
pay  just  enough  to  make  the  salesman  satisfied,  or 
enough  to  make  him  indifferent,  but  to  pay  and  teach 
all  at  the  one  time. 

Let  us  go  on  now  to  the  second  broad  plan  or  pohcy 
for  reducing  selling  costs,  which  investigation  indicated 
to  be  in  wide  use  among  progressive  concerns — making 
salesmen's  work  more  effective  through  better  methods 
of  handhng  samples. 

Perhaps  one  of  the  most  effective  methods  which  has 
been  found  for  accomplishing  this  result  is  the  use  of 
photographs  in  place  of  the  actual  samples.  This  plan 
has  been  tried  out  successfully  by  many  concerns. 

One  concern,  for  example,  photographed  its  entire 
line  at  a  considerable  cost.  That  it  was  worth  this 
expense,  however,  was  made  evident  by  the  increased 
sales.  The  salesmen  reported  that  they  could  make 
more  calls,  show  the  line  to  better  advantage,  and  had 
more  energy  to  put  into  their  sales  talk  when  they  did 
not  have  to  carry  heavy  sample  cases.     Incidentally 


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Expense  Report  No           for  which  I 
have  not  been  reimbursed  by  Office. 

( 

Mileage  Book  Cover  No. 

j 

"          "         "      No. 

/ 

"           "         •'      No. 

1 

"          "         "      No. 

•  CORRECT 

Amount  of  this  Report 
(Less  Ent.  Allowance) 

:                                                   Branch  Manager 

Cash  on  hand 

:  Approved 

( 

TOTAL    FUND 

:                             Asst.  General  Manager  Sales. 

j 

UiwA                                                            "" 

— 

•  Checked  and  Found  Correct : 

/ 

I 

General  Journal  Page. 

Auditor 

I 

Figure  30:  One  eastern  concern  uses  this  effective  form  to  check  up 
on  its  salesmen's  expense  accounts.  This  sheet  first  is  approved  by  the 
assistant  sales  manager,  and  then  is  sent  to  the  auditing  department, 
which  retains  the  left-hand  portion,  returning  the  right-hand  half. 

177 


178  HAMMERING  SALES  COSTS  DOWN 

it  resulted  in  a  big  saving  in  traveling  expenses  as  it 
reduced  by  half,  the  number  of  trunks  each  salesman 
carried.  It  was  considered  necessary  to  carry  only  a 
few  samples  of  new  lines  which  were  introduced. 

Another  concern — it  manufactures  several  hardware 
specialties — carried  this  idea  still  farther  by  getting  up 
series  of  blueprints  of  its  more  complicated  items  to  go 
with  photographs  of  the  products.  These  show  the 
construction  of  the  articles  and  how  they  can  be  used. 

Several  concerns  are  carrying  out  this  idea  in  connec- 
tion with  some  sort  of  a  "silent  salesman"  plan.  One 
such  plan  is  described  at  the  beginning  of  this  section. 
Several  shoe  manufacturers  send  out  trunks  full  of 
samples  without  a  salesman.  The  success  of  this  plan 
is  made  more  secure  because  salesmen  are  given  credit 
for  every  order  coming  out  of  their  territory  as  a  result 
of  the  sample  trunks,  and  every  salesman  boosts  the 
idea.  It  enables  the  manufacturer  to  cover  the  terri- 
tory with  fewer  salesmen,  to  reduce  traveling  expenses, 
and  to  open  accounts  in  towns  which  are  too  small  to 
warrant  constant  covering  by  salesmen. 

HERE'S  A  "SILENT  SALESMAN"  WHICH  GOES  OUT  AFTER  RESULTS 
IN  ABOUT  THE  SAME  WAY  AS  THE  HUMAN  SELLER  WOULD 

As  worked  out  by  one  manufacturer  the  plan  con- 
sists merely  of  the  sending  of  trunks  of  samples  to 
dealers  by  express  and  trusting  to  the  merit  of  the  goods 
to  sell  the  line.  The  trunks  are  routed  to  the  towns 
just  as  a  salesman  would  be. 

Some  manufacturers,  however,  send  the  trunks  to 
dealers  only  on  requests  obtained  through  advertise- 
ments in  trade  papers  and  by  direct  advertising.  A 
sample  of  one  of  the  advertisements  used  by  one  manu- 
facturer to  obtain  these  inquiries  is  shown  in  Figure 
29.  Stock  styles  only  are  sent  out,  as  most  small 
dealers  do  not  care  to  buy  far  in  advance  and  purchase 
only  stock  items  for  immediate  delivery. 


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Figure  31:  Few  concerns  call  for  as  detailed  expense  reports  as  this 
ten-day  one,  but  this  form  is  only  consistent  with  the  care  one  concern 
takes  in  all  its  dealings  with  salesmen.  It  employs  a  large  force,  trains 
it  painstakingly,  and  does  all  possible  to  help  all  the  men  produce  more. 

179 


180         HAMMERING  SALES  COSTS  DOWN 

The  shoe  manufacturers  who  have  worked  out  this 
plan  in  greatest  detail  send  out  the  trunks  only  during 
the  fall  and  spring  buying  seasons.  Cooperation  with 
the  express  companies  has  made  it  possible  to  send  out 
the  trunks  without  locking  them,  the  carrier  assum- 
ing entire  responsibiHty  for  the  safety  of  the  samples. 
Under  this  arrangement  the  expressman  leaves  the 
trunk  with  the  prospect  one  day  and  calls  for  it  on  the 
next,  it  having  been  found  that  busy  dealers  could  not 
be  relied  upon  to  forward  it  as  promptly  as  was  required. 

Sometimes  in  towns  which  the  salesman  did  not 
think  it  worth  while  to  cover,  the  "unchaperoned" 
trunks  have  opened  accounts  which  developed  in  a  short 
time  into  business  well  worth  a  salesman's  visit.  Thus 
they  have  been  new-business  getters. 

The  third  method  of  cutting  down  salesmen's  €sq)ense 
— preparing  dealers  for  the  salesmen's  visits  and  so 
effecting  a  valuable  saving  of  time — has  been  worked 
out  successfully  by  many  concerns  through  the  medium 
of  advance  cards  announcing  the  salesman's  arrival. 

One  wholesale  concern  sends  an  out-of-the-ordinary 
card  which  bears  the  photograph  of  the  salesman  who 
is  scheduled  to  call.  If  the  dealer  knows  the  salesman, 
the  card  is  no  less  welcome,  and  if  he  does  not  it  serves 
as  an  introduction  to  him. 

A  manufacturer  sends  the  following  card : 

Dear  Sirs: 

Representing  A.  L.  Beard  &  Sons,  I  shall 
take  pleasure  in  calling  upon  you  on  (date) 
and  I  will  appreciate  any  favors  accorded  me. 

HENRY  BLAIR 
Please  note  your  shorts  on  the  other  side. 

The  back  of  the  card  has  a  hst  of  16  stock  items 
printed  upon  it.  This  card  not  only  saves  the  time  of 
dealers  and  salesmen  but  it  serves  to  emphasize  the 
desirabihty  of  looking  over  the  stock  and  noting  the 
items  which  need  replenishing.    The  dealer,  through 


REDUCING  SALES  COSTS  WISELY  181 

this  notification  a  few  days  ahead,  is  able  to  go  over  his 
stock  in  ample  time  to  plan  his  purchases. 

One  manufacturer  of  baby  carriages  sends  out  ad- 
vance cards  with  an  illustration  of  the  latest  model  in 
colors  on  the  back,  and  on  the  face  the  naane  of  the  line 
printed  in  green  and  red. 

A  card  which  has  been  pai'ticularly  effective  in 
getting  business  is  used  by  a  jewelry  concern.  This 
firm  makes  a  specialty  of  college-fraternity  jewelry  and 
the  salesmen  try  to  visit  as  many  college  towns  as 
possible  in  the  thi'ee  months  preceding  the  Christmas 
holidays.  About  a  week  before  the  salesman  reaches 
a  town  a  card  is  sent  out  bearing  a  cartoon  picture  of 
the  salesman  and  the  words  "Christmas  is  coming." 
The  picture  is  surrounded  by  a  wreath  of  holly  in  colors 
and  the  card  is  signed  with  a  facsimile  of  the  salesman's 
signature.  Just  below  the  signature  the  salesman 
writes  ''and  so  am  I,"  and  the  date  of  his  arrival. 

It  is  by  such  tested  methods  as  these  that  manu- 
facturers and  wholesalers  from  coast  to  coast,  are 
fighting  the  ever-rising  cost  of  keeping  salesmen  on  the 
road.  By  paying  salesmen  on  a  basis  which  will  insure 
the  greatest  effort  with  the  least  expense,  by  increasing 
the  effectiveness  of  the  methods  used  to  show  the 
goods,  and  by  making  it  possible  through  advance 
notices  to  see  customers  easily  and  quickly,  they  are 
winning  out  all  along  the  line,  and  that  they  have  no 
monopoly  on  these  methods,  their  presentation  here 
may  act  as  proof,  and  a  hint  to  you,  as  well. 


TOURING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbohze  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  PubHca- 
tions  are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  knew 
so  well  during  the  war. 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OP  BUSINESS  STANDARDS 
of  th«  A.  W.  SHAW  COMPANY 


SECTION   11 

Facts  and  Statistics  that  Aid  in 
Choosing  Marketing  Plans 


RETAIL  DATA  AND  FIGURES  TO  HELP  YOU 
CHECK  DISTRIBUTIVE  EXPENSES 

A  RETAILER  of  men's  furnishings  in  an  Indiana 
town  was  rescued  from  a  discouraging  situation 
by  taking  a  traveling  salesman  into  his  confi- 
dence. "My  sales  were  $29,000  last  year— but  after 
taking  out  $35  a  week  for  my  work,  I  had  left  only 
about  $200  net,"  he  explained. 

The  manufacturer  had  given  his  selling  force  rough 
cost  averages  for  clothing  stores  and  had  instructed 
them  to  protect  future  business  by  helping  storekeepers 
who  could  not  "spot"  the  expenses  which  drive  their 
costs  too  high.  The  salesman  offered  to  classify  the 
retailer's  expenditures.  "You're  too  high  on  your 
selling  expense,"  he  declared,  after  figuring  out  per- 
centages for  the  more  important  items.  "The  sales 
were  $29,030.19  and  you  paid  out,  including  what  you 
drew  yourself,  $3,556.57  for  wages.  That's  exactly 
12.25%  of  your  sales,  and  it  should  be  about  10.  On 
that  one  item  alone  you're  $600  above  the  average." 

"Your  rent  is  hauling  you  into  bankruptcy,"  said 
another  manufacturer's  representative  to  a  retailer 
whose  cry  for  help  he  had  answered.  "You  were 
making  a  go  of  it,  so  you  got  excited  and  rented  this 
expensive  place — a  beautiful  shop,  but  way  over  the 
heads  of  your  trade." 

Rapid  work  by  the  merchant  saved  the  day.  He  sold 
the  lease  at  a  price  which  paid  up  rent  in  arrears,  and 
left  a  balance  which  more  than  covered  moving  ex- 


Copyright,  1921,  by 

A.  W.  SHAW  COMPANY 

as  a  part  of  the  Shaw  Selling  Series 


GRAPHIC  SALES  ANALYSIS 


penses.  A  new  store  of  half  the  size,  and  at  a  much 
lower  rental,  provided  ample  space  for  a  normal  stock, 
and  brought  operating  expenses  down  around  the  gen- 
eral average  for  the  line. 

Countless  other  similar  incidents  show  how  helpful 
it  is  to  a  sales  manager  or  salesman  to  have  a  working 
knowledge  of  cost-of-doing-business  figures  for  the  lines 
he  calls  on.  You  cannot  imagine,  for  example,  com- 
peting manufacturers  working  readily  into  the  good 
graces  of  the  two  merchants  just  mentioned.  Service 
of  that  sort  strengthens  the  bonds  of  good  will  between 
a  merchant  and  the  manufacturer  who  helps  him. 

By  themselves,  figures  do  not  mean  much,  true 
enough.  But  when  a  merchant  can  find  the  weak 
points  in  his  own  merchandising  structure  simply  by 
checking  his  own  figures  against  reliable  standards, 
those  standards  give  him  invaluable  service. 

Many  progressive  manufacturers  feel  that  they  have 
engaged  in  no  more  profitable  efforts  than  the  work 
they  have  done  in  teaching  retailers  the  value  of 
accurate  figures.  And  that  has  meant  that  they  them- 
selves must  know  all  about  their  subject>. 


RETAIL  DATA  AND  FIGURES 

For  the  manufacturer  considering  a  campaign  in  the 
national  market,  the  following  list  of  retail  dealers  may  be 
suggestive  of  profitable  distributive  channels. 

Analyzed  in  connection  with  the  tables  on  pages  immedi- 
ately following  these  tables,  it  may  be  of  value  in  showing 
the  tendencies  toward  increase  or  decrease  in  the  number  of 
dealers  in  various  lines.  Close  examination  of  lists  like 
these  is  nearly  always  interesting  and  instructive. 

RETAIL  DEALERS  IN  THE  UNITED  STATES 

(From  R.  G.  Dun  and  Company's  list  as  compiled  by  the 

Rapid  Addressing  Machine  Company) 

Agricultural  implements 15,912 

Animals,  birds,  and  goldfish, 420 

Art  stores  and  pictures 1,900 

Automobiles 10,200 

Bakers 25,788 

Bicycles 5,013 

Booksellers  and  stationers 11,954 

Booksellers  and  stationers  (second-hand) 108 

Boots  and  shoes 20,104 

Butchers  and  meat  markets 62,798 

Carpets 19,316 

Cattle  dealers  and  shippers 20,100 

China,  crockery  and  glassware 2,861 

Cigars  and  tobacco 40,555 

Cloaks  and  suits 1,988 

Clothing 22,713 

Coffee,  tea,  and  spice 3,764 

Confectioners 35,423 

Department  stores 1,752 

Drugs 43,239 

Dry  goods 30,787 

Electrical  supplies 3,272 


GRAPHIC  SALES  ANALYSIS 


RETAIL  DEALERS  IN  THE  UNITED  STATES 
(Continued) 

Fancy  goods  and  notions  (exclusive) 3,759 

Feed,  flour,  and  grain 19,839 

Fishing  tackle 3,885 

Five-and-ten-cent  stores  (independent) 1,054 

Florists 8,482 

Fruit 10,087 

Furs  (raw) 305 

Fur  garments 2,334 

Furniture 16,131 

Furniture  (second-hand) 2,175 

Gas  and  electric  fixtures 2,476 

General  stores 144,933 

Glass,  oils,  and  paint 29,533 

Grain 16,783 

Grocers 172,043 

Guns 3,885 

Hair  goods 1,037 

Hardware 20,881 

Harness  and  saddlery 20,084 

Hats  and  caps 16,240 

Hides 1,528 

Ice 5,429 

Instalment  houses 1,488 

Japanese  and  Chinese  goods 413 

Jewelers 22,025 

Junk 6,213 

Laces  and  embroideries 384 

Lumber 29,669 

Mail-order  houses 1,304 

Men's  furnishings  (exclusive) 12,387 

Milk 11,092 

Milliners 26,843 

Musical  instruments 6,185 

Notions  and  toys 6,892 

Nuts 138 

Oysters  (dealers  and  shippers) 1,222 

Pianos  and  organs 8,040 

Provisions 1,221 

Real  estate 70,491 

Rubber  scrap 31 


RETAIL  DATA  AND  P^IGURES 


RETAIL  DEALERS  IN  THE  UNITED  STATES 
(Continued) 

Sewing  machines 2,102 

Sporting  goods 2,410 

Stamps  and  coins 129 

Stoves 22,177 

Tallow  and  pelts 1^528 

Trmiks 712 

Typewriters  and  supplies 810 

Undertakers 17,808 

Wool 767 

Notice  these  figures  on  dealers  by  lines — 1917  in  com- 
parison with  1913  as  shown  in  the  tables  on  the  two  preced- 
ing pages.  You  find  few  increases,  and  a  very  marked  fall- 
ing off  in  some  lines.  It  may  be  QQ.sy  to  explain  the  de- 
creases by  the  growing  economic  pressure  of  recent  years. 

One  of  the  greatest  developments  in  the  retail  field  within 
recent  years  is  the  chain-store  idea.  In  1914  "Printer's 
Ink"  estimated  that  there  were  more  than  2,000  chain-store 
systems  in  operation  in  the  United  States  and  that  in  these 
systems  there  were  in  excess  of  25,000  stores.  Present 
estimates  range  from  40,000  to  50,000  stores.  It  may  be 
noted  that  the  first  chain-store  sj^stem  was  started  as  early 
as  1859.  The  second  followed  20  years  later.  The  move- 
ment did  not  gain  any  marked  proportions  until  along  about 
1900.  Since  that  time  it  has  made  rapid  strides  until  to- 
day it  is  a  typical  modern  factor  in  distribution  of  merchan- 
dise. It  is  no  longer  regarded  as  an  experiment  and  its 
economic  methods  of  buying  and  of  distribution  will  no  doubt 
be  an  increased  factor  of  contention  in  the  future. 

TOTAL  NUMBER  OF  RETAIL  DEALERS  IN  ALL 
LINES  IN  THE  UNITED  STATES 

Number  in  business 

Grocers 172,007 

Plumbers,  steam-  and  gas-fitters 23,501 

Men's  furnishings 5,582 

Lumber 29,655 

Hardware 30,446 


GRAPHIC  SALES  ANALYSIS 


TOTAL  NUMBER  OF  RETAIL  DEALERS  IN  ALL  LINES 
IN  THE  UNITED  STATES,  Continued 

Number  in  business 

General  stores 61,953 

Furniture 16,121 

Flour  and  feed 14,443 

Dry  goods 32,128 

Drugs 49,939 

Department  stores 1,752 

Clothing 22,737 

Boots  and  shoes 20,091 

Banks  and  bankers 27,030 

Agricultural  implements 15,917 

Automobiles 27,702 

Garages,  supply  and  repair  stations 45,154 

Any  manufacturer  who  sells  to  retailers  will  find  these 
figures  of  value.  Practically  every  manufacturer  whose 
goods  are  sold  over  retail  counters  realizes  the  necessity  for 
training  dealers,  and  this  table  gives  an  interesting  indication 
of  the  general  problem  of  the  individual  retailer.  Certainly, 
effective  help  for  retailers  starts  with  a  clear  understanding 
of  the  problems  they  have  to  solve. 

PER  CAPITA  FIGURES  BY  LINES 
(Based  on  an  estimated  population  of  105,000,000) 

(Retailers) 

1  concern 

to  following 

number  of 

persons 

Grocers 610 

Plumbers,  steam-  and  gas-fitters 4,468 

Men's  furnishing  stores 18,810 

Lumber  dealers 3,539 

Hardware  dealers 3,448 

General  stores 1,694 

Furniture  stores 6,513 

Flour  and  feed  stores 7,270 

Dry  goods  stores 3,2G8 


RET.\I[;  DA'IW  AND  FIGURES 


PER  CAPITA  FIGURES  BY  LINES,  Continued 

1  concern 

to  following 

number  of 

persons 

Drug  stores 2, 102 

Department  stores 59,931 

Clothing  dealers 4,614 

Boot  and  shoe  dealers 5,226 

Banks  and  b  ankers 3,885 

Agricultural  implement  dealers 6,597 

Automobile  dealers 3,790 

Garages,  supply  and  repair  stations 2,325 

It  is  interesting  to  study  the  probable  effect  upon  the 
figures  of  the  next  two  or  three  census  reports,  produced  by 
the  war  and  the  period  of  reconstruction.  There  are  many 
lines  of  business  which  undoubtedly  will  be  seriously  affected. 
And  business  men  in  almost  any  line  surely  may  profit  from 
a  knowledge  of  larger  trade  tendencies. 


RATIOS  OF  MERCHANTS  TO  POPULATION 

Number  of 

Number  of  persons  in 

Number  of         merchants  trade  and 

merchants         per  1,000  of  transporta- 

per  1,000  of       all  gainfully  tion  per  1,000 

total  popu-        employed  in  of  all  gainfully 

Year                    lation            all  industries  employed 

1850 7.51  27.37  109.20 

I860 8.52  29.03  97.38 

1870 9.27  27.56  99.50 

1880 9.55  28.00  107.60 

1890 11.40  29.65  146.29 

1900 10.97  28.66  163.96 

1910 10.92  26.30  199.28 

("Merchants"  include  both  wholesale  and  retail  merchants. 
Figures  are  from  "Economics  of  Retailing"  and  are  based 
on  the  thirteenth  United  States  census.  No  separate  classi- 
fication of  wholesale  dealers  appears  in  census  before  1890). 


GRAPHIC  SALES  ANALYSIS 


To  locate  territories  where  retail  competition  is  keenest, 
and  where  it  is  not  so  strong ;  to  note  from  time  to  time  what 
states  or  groups  of  states  are  showing  the  swiftest  commercial 
development  in  certain  lines — these  are  two  of  the  benefits 

NUMBER  OF  CONCERNS  IN  RETAIL 


States 

by   M 
Groups  q3 

2 

O 

Plumbers,steam- 
and  gas-fitters 

xn 
bD 

.9 

a 

2 

o 

0) 

1 

O 

Group  1 

Maine  1,812 

227 

45 

303 

242 

522 

139 

109 

N.  H.   822 

173 

22 

492 

100 

249 

91 

81 

Vt.    581 

115 

12 

317 

152 

262 

81 

138 

Mass.  8,799 

1,556 

244 

609 

691 

305 

447 

452 

R.  L  1,428 

275 

28 

93 

76 

58 

58 

26 

Conn.  2,859 

530 

59 

206 

169 

238 

194 

217 

Group  2 

N.Y.  20,909 

4,756 

968 

1,882 

2,160 

1,943 

1,238 

1,327 

N.J.  8,322 

1,721 

221 

673 

660 

486 

234 

140 

Pa.  15,980 

2,733 

674 

1,687 

1,971 

4,172 

1,026 

1,394 

Group  3 

Ohio  10,233 

1,209 

320 

1,447 

1,919 

1,831 

854 

1,134 

Ind.   6,907 

593 

126 

816 

1,268 

1,461 

620 

721 

111.   12,647 

1,440 

453 

1,920 

2,387 

2,528 

1,097 

1,704 

Mich.  4,012 

665 

116 

1,068 

1,151 

1,128 

551 

647 

Wis.  3,259 

403 

136 

1,022 

1,072 

1,686 

515 

415 

Group  4 

Minn.  2,223 

312 

98 

1,299 

1,166 

1,613 

523 

451 

Iowa  2,761 

413 

60 

1,707 

1,792 

1,881 

743 

299 

Mo.   6,432 

521 

187 

1,167 

1,438 

2,710 

701 

651 

N. D.   263 

58 

10 

788 

629 

811 

209 

147 

S.  D.   257 

94 

16 

610 

558 

761 

208 

111 

Neb.  1,168 

185 

65 

875 

1,053 

1,460 

520 

280 

Kan.  2,503 

239 

69 

1,158 

1,327 

1,501 

484 

684 

RETAIL  DATA  AND  FIGURES 


which  may  be  derived  from  the  figures  given  here  and  on  the 
two  following  pages.  Used  in  conjunction  with  other 
tables  in  this  group,  the  chart  may  well  prove  suggestive  of 
more  effective  methods  for  organizing  sales  activities. 


LINES  BY  STATES  (Dun's) 


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m 

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a 

73 

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0  ca 

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pq 

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484 

460 

14 

413 

283 

181 

85 

353  555 

6,227 

274 

235 

2 

205 

207 

120 

17 

187  326 

36,03 

166 

190 

3 

158 

131 

105 

27 

175  305 

2,918 

1,600  1,635 

93  1,027 

776 

456 

45 

816  1,675  21,226 

203 

290 

12 

94 

100 

66 

5 

97  274 

3,183 

514 

610 

28 

370 

275 

219 

35 

464  851 

7,838 

3,389  4,110  157  1,852  1,793  1,120  574  2,023  4,064  54,265 
2,027  1,125  50  583  545  347  103  703  1,468  19,408 
2,972  3,450  187  2,177  1,814  1,401  601  1,831  3,082  47,152 


1,698  2,050  117  1,349  1,532  1,168  1,002  1,829  2,798  32,490 

914  1,865  125  781  751  899  908  1,002  1,450  21,207 

1,959  3,850  119  1,620  2,279  1,605  1,566  1,931  3,063  42,168 

1,302  1,655  85  1,044  1,096  795  880  971  1,594  18,760 

638  995  49  648  617  734  1,002  1,085  1,508  15,784 


357  895  52  605  622  1,048  1,070  1,101  1,547  14,882 

494  1,800  70  777  742  1,670  1,404  1,681  2,389  20,683 

1,418  2,530  38  761  839  1,372  720  804  1,387  23,676 

37  463  18  146  81  745  731  521  705  6,362 

73  430  15  179  112  627  551  446  636  5,684 

202  910  18  329  396  942  916  856  1,198  11,373 

428  1,418  94  495  341  1,092  892  996  1,562  15,283 


GRAPHIC  SALES  ANALYSIS 


NUMBER  OF  CONCERNS  IN  RETAIL 


oT  P 

CO 

S? 

O) 

73 

States         2 

by           S 

Groups        2 

^  IS 

3     CO 

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S 

o3 

1 

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O 

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ffi 

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Group  5 

Delaware     612 

53 

15 

88 

58 

122 

35 

41 

Maryland  3,512 

561 

74 

387 

299 

862 

134 

161 

Dist.  Col.  1,407 

161 

36 

26 

54 

42 

50 

Virginia    3,602 

249 

61 

915 

346 

2,352 

283 

123 

W.  Va.      1,441 

191 

46 

330 

242 

1,727 

192 

128 

N.  C.         2,111 

108 

44 

369 

309 

2,545 

245 

42 

S.  C.          1,693 

78 

19 

142 

207 

1,722 

209 

41 

Georgia      4,121 

165 

42 

240 

361 

2,764 

344 

189 

Florida          936 

79 

56 

172 

207 

745 

159 

36 

Group  6 

Kentucky  4,283 

250 

95 

329 

531 

2,288 

273 

180 

Tenn.         3,885 

157 

43 

374 

221 

1,839 

291 

160 

Alabama    2,408 

101 

51 

236 

265 

1,950 

234 

68 

Miss.          1,760 

56 

27 

246 

206 

2,332 

138 

41 

Group  7 

Arkansas    2,271 

100 

30 

421 

334 

1,619 

202 

105 

Louisiana  2,781 

137 

32 

219 

182 

1,481 

119 

120 

Okla.          2,704 

187 

80 

914 

880 

1,332 

475 

275 

Texas         5,076 

271 

183 

1,217 

1,015 

3,297 

854 

555 

Group  8 

Montana      261 

98 

45 

248 

162 

455 

72 

59 

Idaho            225 

72 

22 

202 

183 

385 

85 

91 

Wyoming      101 

41 

20 

79 

75 

222 

36 

17 

Colorado   1,903 

262 

65 

412 

340 

660 

207 

27 

N.  Mex.       213 

42 

10 

116 

81 

445 

50 

32 

Arizona         179 

49 

14 

64 

29 

225 

27 

18 

Utah            515 

102 

9 

126 

54 

318 

67 

66 

Nevada        118 

27 

18 

44 

36 

132 

16 

15 

Group  9 

Wash.        1,417 

317 

82 

408 

519 

812 

259 

238 

Oregon       1,113 

282 

76 

434 

293 

594 

198 

148 

Calif.         7,182 

1,087 

358 

758 

876 

1,122 

342 

289 

RETAIL  DATA  AND  FIGURES 


LINES  BY  STATES, 

Continued 

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ri 

in 

Ct4 

00 

O 
O 

3 

d 

c3 

o 

d 
d  5:3 

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d 
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c3  g  « 

O 

H 

88 

115 

5 

64 

42 

49 

19 

74 

108 

1,588 

448 

550 

34 

259 

233 

249 

157 

230 

420 

8,570 

104 

215 

11 

87 

53 

35 

8 

291 

151 

2,731 

501 

660 

18 

430 

159 

408 

167 

66 

456 

10,796 

209 

400 

25 

318 

164 

303 

42 

227 

302 

6,287 

524 

800 

17 

292 

194 

451 

32 

331 

480 

8,894 

404 

487 

3 

272 

149 

363 

10 

211 

316 

6,326 

822 

1,240 

22 

436 

235 

802 

40 

392 

651 

12,866 

485 

600 

8 

169 

134 

232 

1 

254 

474 

4,747 

734  1,058  30  372  288  599  179  303  453  12,245 

613  765  19  399  404  523  125  227  366  10,411 

420  942  14  197  154  350   11  185  299  7,885 

335  725  5  130  103  366   14  133  197  6,814 

364  1,086  9  175  91  468   19  214  323  7,831 

440  800  9  237  135  260  131  170  251  7,504 

605  1,320  10  398  236  926  407  459  719  11,927 

1,774  2,937  13  621  254  1,452  337  877  1,464  22,197 


82 

295 

9 

149 

105 

224 

99 

266 

385 

3,014 

99 

272 

10 

130 

82 

193 

117 

177 

24 

2,369 

48 

91 

0 

53 

47 

94 

19 

88 

137 

1,168 

338 

648 

27 

272 

222 

322 

145 

356 

556 

6,762 

61 

141 

4 

34 

34 

96 

21 

95 

154 

1,629 

66 

94 

1 

79 

51 

66 

16 

124 

199 

1,311 

73 

178 

6 

116 

49 

102 

86 

111 

174 

2,152 

29 

55 

1 

39 

35 

33 

9 

60 

103 

770 

330  720  23  437  267  364  160  418  686  7,457 
211  465  12  191  206  249  133  229  412  5,246 
772  1,390  61  768  733   739  279  1,262  2,457  20,475 


GRAPHIC  SALES  ANALYSIS 


Many  a  retailer  understands  selling,  yet  is  not  an  able 
merchant  simply  because  other  extremely  important  phases 
of  retail  management  do  not  interest  him.  Perhaps  he  even 
doubts  the  value  of  obtaining  accurate  knowledge  about  his 
costs  of  doing  business — he  may  look  upon  costs  as  so  much 
useless  "red  tape."  The  following  table  presents  a  graphic 
and  unusual  statement  based  on  the  latest  available  census, 
showing  where  a  good  portion  of  the  retailer's  money  goes. 
Note  the  number  of  persons  employed  as  salespeople. 

PERSONS  ENGAGED  IN  RETAILING 
Retail  merchants  and  dealers,  total 1,195,029 

Agricultural  implements 8,518 

Automobiles 4,597 

Books 3,118 

Boots  and  shoes 19,346 

Butchers 124,048 

Candy  and  confectionery 29,538 

Cigars  and  tobacco 17,728 

Clothing  and  men's  furnishings. .  35,273 

Coal  and  wood 24,466 

Department  stores 8,970 

Drugs  and  medicines 67,575 

Dry  goods,  fancy  goods,  notions.  65,283 
Five-and-ten-cent  and  variety...     4,331 

Furniture 22,209 

General  stores 88,059 

Groceries 195,432 

Hardware  stores,  cutlery 39,663 

Harness  and  saddlery 7,541 

Hucksters  and  pedlers 80,415 

Jewelry 29,962 

Lumber 26,485 

Music  and  musical  instruments. .     5,222 

News  dealers 7,075 

Oil,  paint,  wall  paper 6,818 

Opticians 6,284 

Produce  and  provisions 29,639 

Rubber  goods 493 

Cashiers  in  stores 28,500 

Clerks  in  stores 387,183 


GRAPHIC  SALES  ANALYSIS 


PERSONS  ENGAGED  IN  RETAILING,  Continued 

Bundle  and  cash  boys  and  girls 10,866 

Decorators,  drapers,  window  dressers 5,341 

Delivery  men 205,589 

Demonstrators 4,380 

Elevator  tenders 3,075 

Store  laborers 68,093 

Meat  cutters 15,405 

Salesmen  and  saleswomen 875,180 

Scrubbers  and  sweepers 276 

Here  is  a  different  a'lalysis  of  the  same  concerns  listed  in 
the  tables  on  the  foIIowir:g  page.  By  comparing  these  tables 
it  is  possible  to  arrive  at  interesting  and  helpful  conclusions. 

GENERAL  SUMMARY  OF  TRADING  CONCERNS 
IN  MASSACHUSETTS* 

Number  of  establishments 29,045 

Dealing  in  raw  materials. . .  1,682 

Dealing  in  food  products .  .  14,224 

Dealing    in    manufactured 

goods 13,139 

Total  capital  invested $    287,966,456 

Raw  materials $  42,897,034 

Food  products 71,708,282 

Manufactured  goods 173,361,140 

Value  of  goods  sold $1,384,161,383 

Raw  materials $270,159,171 

Food  products 448,002,405 

Manufactured  goods 665,999,807 

Total  number  of  wage  earners 129,129 

Males 90,332 

Females 38,797 

Total  number  of  salary  earners 15,330 

Males 13,031 

Females 2,299 

Retail  stores — total 24,522 

Raw  materials 1,038 

Food  Products 12,441 

Manufactured  goods 11,043 

*From  "The  Eoonomics  of  Retailing,"  by  Paul  H.  Nystrom 


GRAPHIC  SALES  ANALYSIS 

In  the  table  presented  below  and  on  the  upper  portion  of 
the  opposite  page,  the  total  amount  of  goods  manufactured 
and  imported  is  compared  with  the  total  population  of  the 
United   States  and  with  the  total  number  of  persons  em- 

COMPARISON  OF  THE  TOTAL  AMOUNT  OF  GOODS 
POPULATION  AND  WITH  TOTAL  NUMBER 

Manufac- 
tured 

goods  Imports  Total  Number 

(000,000  (000,000  (000,000  of 

omitted)  omitted)  omitted)  retailers 

1850 $1,109  $174  $1,193  174,000 

1860 1,886  331  2,217  268,000 

1870 3,386  418  3,804  358,000 

1880 5,370  446  5,816  479,000 

1890 9,372  745  10,117  691,000 

1900 13,000  697  13,697  833,000 

1910 20,672  1,312  21,984  1,004,000 


This  table  indicates  about  what  ratio  ought  to  prevail, 
normally,  between  the  various  classes  of  distributive  agencies. 

CLASSIFICATION  OF  TRADING  CONCERNS  IN 
MASSACHUSETTS  BY  MANNER  OF  SELLING 

Value  of 
Number     Capital        goods  sold      Wages  Salaries 

Retail. .  .24,522  $120,065,311  $444,984,052  $849,075    78,206 

Whole- 
sale.... 3,315    109,952,787    510,016,634    359,150  152,492 

Jobbing.      480      16,777,443      81,017,798      56,926    32,924 

Commis- 
sion....     570      24,255,758    253,670,922      48,048    29,711 

Ex  port 
ing 12  237,500        2,492,083         389  627 

Import- 
ing       129      15,516,364      83,540,190      13,644    13,735 

Export- 
ing and 
import- 
ing          17        1,161,293        8,519,704        3,254      2,218 


RETAIL  DATA  AND  FIGURES 


ployed.  Note  that  amounts  represent  millions — with  the 
000,000  omitted.  Analyses  of  this  sort  have  infrequently 
pointed  out  to  distributors  weak  spots  in  their  marketing 
plans  or  have  indicated  the  need  of  investigations. 

MANUFACTURED    AND    IMPORTED,    WITH   TOTAL 
OF   PERSONS   GAINFULLY   EMPLOYED* 


Number  of 
commercial 
Year  travelers 

1850 

1860 

1870 7,000 

1880 28,000 

1890 59,000 

1900 93,000 

1910 164,000 


Total 

number 

Total 

employed  in 

Total 

popula- 

trade and 

number 

tion 

transporta- 

gainfully 

(000,000 

tion 

employed 

omitted) 

682,000 

5,330,000 

23 

802,000 

8,236,000 

31 

1,244,000 

12,506,000 

39 

1,872,000 

17,392,000 

50 

3,326,000 

22,736,000 

63 

4,767,000 

29,073,000 

76 

6,252,000 

38,167,000 

92 

These  tables,  made  up  from  reports  obtained  in  a  recent 
year,  suggest  the  extent  to  which  chain  stores  are  becoming 
an  independent  distributive  factor  in  several  lines.  These 
figures  have  an  added  importance  due  to  the  fact  that  the 
list  of  lines  being  handled  by  this  distribution  division  is 
growing  very  rapidly. 


CHAIN  STORES  BY  LINES 

Line  Chains 

Grocery 500 

Tobacco 250 

News-stands 200 

Five-and-ten-cent,  and  so  on 180 

Oil,  gasoline,  and  so  on 5 

Drug 200 


Stores 

8,000 
2,500 
2,500 
2,000 
2,000 
1,400 


RETAIL  DATA  AND  FIGURES 


Line,  continued                                      Chains  Stores 

Delicatessen 5  15 

Wall  paper 5  15 

Gloves 3  10 

Furs 2  6 

Paper  novelties 1  6 

Fountain  pens 1  4 

Total 2,778  30,509 

GROCERIES 

Indepen- 

Chain  dent 

Total     Chains     stores  stores 

Greater  New  York..     13,513        17             680  12,833 

Chicago 7,510        10             130  7,380 

Philadelphia 5,200          9          1,262  3,938 

Boston 2,829        10             456  2,373 

TOBACCO 

Greater  New  York..       2,394          9             439  1,955 

Philadelphia 2,350          5              45  2,305 

Chicago 1,100          9             172  928 

Boston 308          2               16  292 

DRUGS 

Greater  New  York . .       2,281        11              82  2,199 

Chicago 1,106          4               17  1,089 

Philadelphia 921        12              53  868 

Boston 314          6              34  280 

FIVE-AND-TEN-CENT  STORES 

Greater  New  York..          225        15               50  175 

Chicago 150          3               25  125 

Philadelphia 145          4              20  125 

Boston 32          2                7  25 


ELEVEN  YEARS  IN  RETAIL  GROCERY  TRADE, 
GREATER  NEW  YORK 

1903        1914     Increase      Per  cent 

All  stores 8,750    13,513       4,763  54 

Chain  stores 215         985  770  360 


GRAPHIC  SALES  ANALYSIS 


The  advantages  to  manufacturers  of  the  figures  in  the 
tables  following  are  apparent.  They  deal  intimately 
with  several  of  the  most  pertinent  problems  of  retail 
management.  They  help  an  outsider  to  grasp  the 
retail  point  of  view,  and  for  those  manufacturers  who 
see  in  the  assistance  they  can  give  to  retail  dealers  an 
opportunity  to  build  good  will,  the  retail  point  of  view 
is  practically  a  necessity. 

Figures  are  of  little  value  in  themselves.  Yet  just 
as  soon  as  you  have  sets  of  figures  which  are  in  any 
way  comparable,  you  have,  the  chances  are,  a  key  to 
some  interesting  facts.  In  a  word,  accurate  figures  are 
a  starting  point  rather  than  an  end. 

Right  here  many  retailers  fall  down,  and  it  may  be 
that  one  of  the  greatest  helps  manufacturers  can  give 
to  retailers  is  in  teaching  them  how  to  use  figures.  Too 
many  retailers  have  installed  cost-accounting  systems, 
and  then  thrown  them  out  again,  mainly  because  they 
did  not  know  what  to  do  with  the  information  supplied 
by  their  systems. 

To  come  back  to  ways  by  which  manufacturers  may 
use  the  figures  presented  here,  investigation  frequently 
has  brought  to  light  instances  of  manufacturers'  sales- 
men pointing  out  to  some  of  their  retail  customers 
ways  and  means  for  cutting  down  overhead  and  thereby 
increasing  profits.  Not  a  few  of  the  stores  involved 
were  actually  saved  from  financial  difficulties  and  were 
put  on  sounder  footings  by  means  of  advice  furnished 
by  manufacturers — advice  built  on  study  of  just  such 
figures  as  those  which  follow. 

Wages  for  selling  apparently  are  comparatively  low  for 
grocery,  furniture,  and  variety  stores  in  proportion  to  sales. 
This  is  because  these  lines  are  characterized  either  by  very 
frequent  small  sales  or  fairly  numerous  sales  at  a  high  average 
amount  for  each  sale.  Local  conditions,  of  course,  frequently 
vary  these  figures  one  way  or  the  other. 


RETAIL  DATA  AND  FIGURES 


AVERAGE  PERCENTAGE  FOR  SALARIES  OF 
SALESPEOPLE  (System,  February,  1914) 

Groceries 7.96% 

Furniture 8.73% 

Variety  stores 8.86% 

Clothing 9.49% 

Dry  goods 9.65% 

Hardware 10.11% 

Shoes 10 .  51% 

Drugs 10.93% 

Jewelry 10.96% 

The  number  of  times  a  retailer  turns  his  stock  is  coming  to 
be  a  widely  accepted  measure  of  his  merchandising  skill. 
Even  so,  many  retailers  fail  to  recognize  the  importance  of 
average  rate  of  turnover  statistics  for  their  own  lines. 

The  figures  given  below  are  averages  applying  exclusively 
to  department  stores,  and  were  obtained  by  the  National 
Dry  Goods  Association. 

Average  number  of 
turnovers  obtained 

Line  annually 

Candy 13.27 

Skirts  and  petticoats 7 .  22 

Millinery 6 .  63 

Coats,  suits,  and  dresses 5.5 

Stoves,  refrigerators,  and  cookers 5.45 

Shirtwaists 5 .  14 

Patterns 5 .  05 

Furs 4 .  55 

Children's  wear 4 .  45 

Corsets 4.43 

Toys  and  books 4.42 

Umbrellas 4 .  38 

Sewing  machines 4 .  37 

Neckwear  and  handkerchiefs 4 .  26 

Wash  goods 4 .  17 

Notions 3 .97 

Linings 3 .  77 

White  goods 3.76 

Hosiery 3 .  65 

Furniture 3 .  65 


Turnovers  in  Representative  Lines 


=Oiu  Tumoyw 


Figiire  33:  To  pull  what  is  considered  a  fair  profit  for  these  lines  up 
the  grade  of  the  cost  of  doing  business,  requires  on  an  average  the  num- 
ber of  turnovers  here  represented  by  circles.  Corsets,  you  will  note, 
have  the  lowest  percentage  of  profit  and  the  highest  rate  of  turnover. 


GRAPHIC  SALES  ANALYSIS 


Average  number  of 
turnovers  obtained 

Line,  continued  annually 

Jewelry,  toilet  goods,  bags,  and  belts 3 .45 

Linens 3 .  40 

Trunks  and  bags 3 .  39 

Hair  goods 3 .  22 

Muslin  underwear 3 .  20 

Table  linen  and  towels 3 .  09 

Ribbons 3.01 

Gloves  and  veilings 2 .  96 

Silks 2.91 

Dress  goods 2 .  90 

Knit  underwear 2 .  89 

Wall  paper  and  decorations 2.88 

Men's  furnishings 2 .  73 

Boys'  clothing 2 .  56 

Men's  clothing 2.53 

Laces 2.50 

Infants'  wear 2.41 

Art  goods  and  needlework 2.34 

Embroideries  and  trimmings 2 .  26 

Rugs,  carpets,  and  linoleums ». . . .  2. 18 

Shoes  and  rubbers 2 .  18 

China,  glass,  and  house  furnishings 2.03 

Individual  conditions  vary  the  number  of  turns  secured 
in  specific  stores.  The  standards  given  in  this  table  there- 
fore require  modification  when  local  influences  are  unusual. 
The  turns  obtained  in  a  large  department  store  and  in  a 
country  general  store  will  differ  because  of  the  heavy  buying 
power  touched  by  the  city  store  and  its  managers'  skill. 
These  turnover  averages  are  from  several  large  department 
stores  and  a  score  or  more  departmentalized  concerns  in 
country  districts. 

Number  of  turns  obtained 

annually : 
City  depart-  Country  gen- 
Line  ment  stores     eral  stores 

Books 4  1.5 

Candy 15  9 

Clocks 2.5  1 


GRAPHIC  SALES  ANALYSIS 


Number  of  turns  obtained 
annually: 

City  depart-  Country  gen- 
Line,  continued  ment  stores     eral  stores 

Embroideries 3.5  3 

Furs 5  3 

Infants*  clothing 5  3 

Laces 4  2 

Linens 3.5  2 

>.Ien's  hats 7  4 

Pianos 9  4 

llibbons 6  2 

Stationery 5  2 

Umbrellas  and  canes 11  3 

Trunks 5  1.5 

Veilings 5.5  2 

Wash  goods  and  flannels 5  3.2 

National  stock-turn  averages  from  over  700  American 
stores  were  figured  to  give  the  averages  for  the  10  standard 
types  shown  in  this  list.  The  turnovers  are  for  the  com- 
plete stocks  and  have  no  reference  to  either  the  character 
or  the  number  of  the  lines  carried. 

Average  number  of 
turnovers  obtained 

Type  of  store  annually 

Grocery 10 

Department 7 

Variety  goods 6 

Drug 4.5 

Dry  goods 4 

Hardware 3.5 

Furniture 3 

Shoe 2.1 

Clothing 2 

Jewelry 1.5 

From  the  books  of  several  hundred  stores  carrying  depart- 
mentalized stocks,  averages  for  12  standard  lines  were 
obtained  as  shown  in  the  table  on  the  following  page. 


GRAPHIC  SALES  ANALYSIS 


Average  number  of 
turnovers  obtained 

Line  annually 

Notions 9 

Corsets 8 

Women's  ready-to-wear 6 

Wall  paper 4.2 

Men's  furnishings 4.2 

Underwear 4.1 

Hosiery 4 

Gloves 3.5 

Dress  goods 3.2 

Silks... 3.1 

Domestics 3 

Carpets 1.5 


PROFITS  IN  60  LINES  AND  TRADES 
Each  of  the  percentages  assembled  here  gives  gross  prof- 
its for  an  actual  line,  store,  or  manufacturing  plant.  All 
the  distributive  channels  are  included.  By  combining  the 
figures  it  is  possible,  in  several  instances,  to  obtain  a  rough 
estimate  of  the  cost  of  getting  certain  lines  from  the  factories 
to  the  consumers'  doors.  All  percentages  are  based  on 
total  sales. 

TYPICAL  GROSS  PROFITS 

Per  cent 

American  Family  Soap  (at  full  price) 16 .  36 

Barrington  Hall  Coffee  (at  full  price) 20 

Borden's  Eagle  Milk  (at  full  price) 13.33 

Campbell's  Soup  (at  full  price) 25 

Chain  grocery  stores  (three)   (49.5%  re- 
ported by  the  Association  for  Improving 

conditions  of  the  Poor) 15  to  49 . 5 

Clothing  stock  (southern  store) 20        (average) 

Collar  stock  (men's),  New  York  City  (cost 

of  doing  business,  29%) 26 

Cotton  dress  goods  stock 32  to  41 

Cream  of  Wheat  (at  full  price) 16 .  66 

Dr.  Price's  Baking  Powder  (at  full  price) . .  23 .  33 
Fels  Naphtha  Soap  (at  full  price) 20 


RETAIL  DATA  AND  FIGURES 


TYPICAL  GROSS  PROFITS,  Continued 

Per  cent 

Furniture  store  (operating  cost,  31%) 49 

Grocery  store  (cost  of  doing  business,  20%) 

(Sales,  $101,877.00) 25        (average) 

Hat  stock  (men's) 39        (average) 

Hardware  (large  store) 33 .  33  (average) 

Hardware  line  (jobber  made  17%) 31 

Hardware  store  (town  of  2,000;  cost  of  do- 
ing business,  25%).. 37.5    (average) 

Instalment  hardware  line 62 

Ivory  Soap  (at  full  price) 20 

Kellogg's  Toasted  Corn  Flakes  (at  full  price)  22 .  33 
Large  department  store  (seven year  average)  24 . 5 

Malt  Breakfast  Food  (at  full  price) 16 .  66 

Mail-order  house  (largest  in  the  world) 25        (average) 

Meat  line  (No.  2  loin) 33.33 

Meat  line  (ribs) 40 

Meat  line  (500  lb.  steer — cost  13Hc  per  lb. ; 

sold  for  143^  to  16c  per  lb.) 12 

Neckwear  stock  (New  York  City — used  as  a 

"loss  leader") 26 

Pet  Milk  (at  full  price) 13.33 

Pillsbury's  Best  Breakfast  Food   (at  full 

price) 16 .  66 

Quaker  Oats  (at  full  price) 21 .7 

Ralston  Breakfast  Food  (at  full  price) ....    16 .  66 
Ready-made  clothing  lines  (Tariff  Board) .  .   33 .  33 
Restaurant  menu  (highest  profits  taken  on 
salads  and  pastries;  lowest  on  meats) ....     0  to  300 

Royal  Baking  Powder  (at  full  price) 20 .  84 

Rumford  Baking  Powder  (at  full  price) ...   23 .  31 
Shredded  Wheat  Biscuits  (at  full  price) ...  20 

Shoe  store  ($5— $6  lines  at  retail) 25  to  33 .  33 

Shoe  store  (S6— $15  lines  at  retail) 45        (average) 

Shoe  store  ($4.50  shoes  cost  $2.40  and  $2.65; 

$5.00  shoes  cost  $2.85  and  $3.25) 40        (average) 

Syrup  line  (at  full  price) 18 

Uneeda  Biscuits  (at  full  price) 16.66 

Variety  goods  bargain  basement 15  to  25 

Variety  goods  store  (average  cost  5c 
articles,  40c  a  doz.;  average  cost  25c 
articles,  $2.00  a  doz.) 25  to  33.33 


GRAPHIC  SALES  ANALYSIS 


TYPICAL  NET  PROFITS  OF  RETAIL  STORES 

Per  cent 

Wesson  Salad  Oil  (at  full  price) 20 

Cash  grocery 3  to    5 

Clothing  stock  (southern  store) 4 

Commissary  and  general  store 8  to  10 

Dry  good  stores  (small  town) 10  to  12 

Dry  goods  stores  (large  city) 5  to    7 

Furniture  stock 18 

Grocery 4  to    5 

Hardware  store  (town  of  5,000) 12.5 

Large  department  store  (average  for  seven  years) . .  3.1 
Mail-order  houses  (average  three  years;  operating 

cost  of  largest  concerns,15%) 6.8 

Variety  goods  store 10  to  12 

Variety  goods  bargain  basement 5  to  10 

In  the  preceding  table  are  given  typical  net  profits  for  12 
types  of  retail  stores.  You  will  readily  note  that  stores 
such  as  groc  eries  and  large  department  stores,  which  ordi- 
narily have  a  more  rapid  rate  of  turnover,  have  the  smallest 
net  profit.  This  is  in  line  with  the  contention  of  many  ex- 
perts that  it  is  better  business  to  take  small  profits  and  rapid 
turnovers  than  to  rely  on  higher  mark-ups. 

TYPICAL  GROSS  PROFITS  OF  LARGE 
DEPARTMENT  STORES 

Per  cent 

Art  goods  or  needlework 28 

Blankets,  comforters,  pillows,  and  eo  on 27 

Cameras 26 

China  or  glassware 32 

Clocks  and  watches 28 

Colored  dress  goods 28 

Harness 31 

Infants'  clothing 30 

Leather  goods 32 

Linings 32 

Neckwear  (women's) 29 

Notions 31 

Trimmings 28 

Upholstery 33 


Figure  45:  That  all  lines  of  business  are  very  much  alike  when  it 
comes  to  the  distribution  of  expense  is  shown  by  this  chart  of  itemized 
average  costs  in  six  standard  lines.  Rent,  salaries,  and  advertising 
costs  in  every  instance  take  the  major  portion  of  the  total  expenditure. 


GRAPHIC  SALES  ANALYSIS 


COSTS  AND  PROFITS  FROM  24  STATES 

GROSS  PROFITS 

(States  with  five  highest  percentages) 

Kentucky 33.86%        Alabama 30.50% 

Minnesota 33.30%        Virginia 31.41% 

Tennessee 33.12% 

AVERAGE  COST  OF  DOING  BUSINESS 
(States  with  six  highest  average  percentages) 

Tennessee 27.34%        Nebraska 26.83% 

Indiana 27.00%        Alabama 25.94% 

Minnesota 27.00%        Texas 25.58% 

AVERAGE  NET  PROFITS 
(States  with  six  highest  average  percentages) 

Utah 11 .00%        Louisiana 9.40% 

Kentucky 10.66%        Michigan 8.00% 

West  Virginia 9.80%        New  York 6.00% 

AVERAGE  GROSS  PROFITS 
(By  population  and  locality) 

75,000-100,000  population 33.23% 

15,000-25,000  population 31 .29% 

100,000  and  over,  population 31.07% 

50,000-75,000  population 30.20% 

25,000-50,000  population 30.00% 

Farming  districts ^ 31 .80% 

Manufacturing  and  farming  localities 30 .  00% 

Resorts. 29.95% 

Manufacturing  centers 29. 


AVERAGE  COSTS  OF  DOING  BUSINESS 
(By  population  and  locality) 

300,000,  and  over,  population  (lowest) 21 .25% 

75,000-100,000  population  (highest) 27.03% 

Shipping  centers 24 .  88% 

Farming  districts 25 .  52% 

Resorts 24.00% 

Manufacturing  centers 23 .  22% 


AVERAGE  COSTS  OF  DOING  BUSINESS 


Figure  49:  Comparison  of  this  chart  of  costs  with  that  in  Figure  50 
demonstrates  that  department  stores,  purchasing  for  rapid  clearances, 
overcome  high  costs  by  taking  small  net  gains  on  numerous  turnovers. 


% 
42- 

39- 


36-- 


Retail  Mark-Ups,  Costs,  and  Profits 


Cost  of  Doing  Business  i^ 
Net  Profit  (Single  Turnover) 


Figure  50:  This  chart,  assembled  from  the  figures  of  579  concerns, 
shows  gross  mark-ups  divided  into  costs  and  net  gains.  Since  only 
one  turnover  is  represented,  the  profits  on  investment  are  not  included. 


GRAPHIC  SALES  ANALYSIS 


DEATH  RATE  OF  RETAILING  CONCERNS 

Dry  goods  merchants  in  business  5  years  or  less.  .  17-68% 

Jewelers  in  business  5  years  or  lass 13-50% 

Shoe  dealers  in  business  5  years  or  less 23-49% 

Hardware  dealers  in  business  5  years  or  less 10-48% 

Meat  dealers  in  business  5  years  or  less 36-48% 

Grocers  in  business  5  years  or  less 76-45% 

Druggists  in  business  5  years  or  less 17-43% 

Cigar  dealers  in  business  5  years  or  less 18-39% 

Furniture  dealers  in  business  5  years  or  less 8-38% 

Clothiers  in  business  5  years  or  less 14-35% 

The  most  startling  mortality  figures  come  from  retail 
lines.  Would  it  be  worth  money  to  you  to  feel  certain  that 
all  your  retail  customers  were  such  good  business  men  that 
they  would  stay  in  business  for  a  long  time?  The  answer 
suggests  the  value  of  these  figures. 

DEATH  RATE  BY  "GENERATIONS"  FOR 
10  RETAIL  LINES 

(Percentage  of  total  concerns  in  each  "generation" 
which  died  within  5  years) 

Line                        1891  1896  1901  1906  1911 

Groceries 44%  61%  56%  61%  63% 

Hardware 40%  45%  50%  36%  66% 

Paintsand  wall  paper  62%  57%  40%  55%  69% 

Drugs 37%  51%  45%  30%  39% 

Booksandstationery  75%  57%  50%  50%  38% 

Jewelry 33%  46%  36%  41%  65% 

Dry  goods 50%  59%  65%  57%  39% 

Clothing 45%  80%  40%  52%  56% 

Boots  and  shoes....  53%  53%  48%  57%  58% 

Furniture 70%  50%  37%  62%  61% 

This  table  shows  the  death  rate  by  generations  of  the  10 
retail  lines  that  were  investigated.  Totals  such  as  these 
impress  us  with  the  seriousness  of  the  problem  and  empha- 
size the  necessity  of  keeping  a  whip-handle  grip  at  all  times 
on  those  facts  and  principles  which  have  a  fundamental  and 
vital  bearing  on  the  permanency  of  any  business. 


RETAIL  DATA  AND  FIGURES 


HOW  FAST  1,615  RETAIL  STORES  DIED 

Deaths  within 

Total      5  10  15  20  25 

Line                       deaths  years  years  years   years  years 

Groceries 836  614  125  59  30  8 

Hardware 74        48  15  6  4  1 

Paints  and  wall 

paper 78        58  15  3  2 

Drugs 115        69  30  13  2  1 

Books  and  station- 
ery      43        29  12  1  1  ... 

Jewelry 52        38  9  3  ...  2 

Dry  goods 142  108  19  10  3  2 

Clothing 52        41  9  1  ...  1 

Boots  and  shoes.  ...    177  121  32  17  6  1 

Furniture 46        35  6  4  1  ... 

The  majority  of  retail  stores  that  "died"  went  out  of 
business  in  the  first  five  years,  as  the  above  table  shows. 
Grocery  stores,  you  will  note,  have  the  greatest  number  of 
"deaths,"  most  of  which  occur  during  the  concern's  first  five 
years  of  business  life.  Furniture  concerns  apparently  are 
the  longest  "lived"  of  these  retail  lines. 

DEATH  RATE  FOR  2,550  RETAIL  CONCERNS 

(The  rate  is  given  as  the  percentage  of  failures  to  the 
concerns  in  business  during  a  period  of  30  years  total) 

Line  Rate 

1.  Groceries 65 . 3% 

2.  Hardware  57.3% 

3.  Paints  and  wall  paper 66 . 6% 

4.  Drugs 58.3% 

5.  Books  and  stationery 67. 1% 

6.  Jewelry 52.0% 

7.  Dry  goods 67.6% 

8.  Clothing 54.7%, 

9.  Boots  and  shoes 65 . 0% 

10.  Furniture 53.4% 

Death  rate  for  2,550  retail  stores  in  10  lines ...     58 . 6% 


HOW  FAST  THREE  "GENERATIONS"  OF  RETAIL  CLOTHING  STORES  DIED. 

COMPANY 

1891 

1896 

1901 

1906 

1911 

1916 

DEATH  RECORD 

1 
2 
3 

4 
5 

8 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 

First 

"Generation' 

45%  died 

within  5  years 

21 
22 
23 
24 
25 
26 
27 
28 
.29 
30 

Second 

"Generation" 

80%  died 

wtttiin  5  years 

31 
32 
33 
34 
3S 
36 
37 
38 
39 
.40 
41 
42 
43 
44 
45 

Third 

'Generation 

40%  died 

within  5  years 

Figure  53:  Between  1886  and  1901,  45  clothing  stores  started  in  busi- 
ness in  one  section,  but  only  15  were  in  business  at  the  end  of  1916. 
The  highest  percentage  death  rate,  as  you  will  note,  appeared  among 
those  concerns  which  started  their  business  life  in  the  second  generation. 


RETAIL  DATA  AND  FIGURES 


CHANGES  IN  RETAIL  FIRMS  IN  EDGERTON 
DURING  10  YEARS 

Total  retail  stores  in 1890     1896     1900 

Total  stores,  1890 21          9  7 

New  firms,     1896 7  4 

New  firms,     1900 5 

Summary                                                   21        16  16 

CHANGES  IN  RETAIL  FIRMS  IN  CLINTON 
DURING  10  YEARS 

Total  retail  stores  in 1890     1896     1900 

Total  stores,  1890 15          8  7 

New  firms,     1896 7  1 

New  firms,     1900 T_ 

Summary                                                     15        15  15 

These  compilations  of  the  causes  of  failures  are  also  taken 
from  "The  Economics  of  Retailing,"  by  Paul  H.  Nystrom. 

BRADSTREET'S  CLASSIFICATION  OF 
BUSINESS  FAILURES 
Beginners'  Handicaps: 

1.  Lack  of  capital 29.7 

2.  Incompetence 30 . 2 

(a)  Inexperience 4.6 

(b)  Unwise  credits 2.0 

6675 
Personal  Faults  of  Character: 

1.  Fraud 10.3 

2.  Neglect  of  business 2.0 

3.  Personal  extravagance 7 

iO 

Factors  Threatening  Success: 

1.  Competition 1.9 

2.  Failure  of  others 1.3 

3.  Speculation  in  other  business 8 

4.  Specific  conditions  (disaster,  and  so  on) 16 . 5 

2X5 


GRAPHIC  SALES  ANALYSIS 


CLASSIFICATION  OF  CAUSES  OF  FAILURES 
IN  THE  RETAIL  BUSINESS 

Beginners'  Handicaps: 

Lack  of  capital 29 . 5 

Incompetence  (including  inexperience) 24 . 0 

Unwise  credits 4.4 

General  expense  too  high 3.0 

Poor  location 2.2 

Expansion  (branch  stores) 2.0 

65.1 

Personal  Faults  of  Character: 

Fraud 4.0 

Neglect  of  business 4.0 

Personal  extravagance 4.8 

Intemperance 2.0 

iO 

Factors  Threatening  Success: 

Loss  by  storm,  flood,  fire,  and  so  on 3.8 

Sickness 3.5 

Failure  of  others 2.6 

Speculation 2.1 

Competition 1.4 

Closed  by  "sharks" 1.2 

Robbery  of  store 1.0 

Death 8 

Loss  in  contracts 8 

Miscellaneous  causes 2.9 

20.1 

There's  no  questioning  the  value  of  information  like  this 
(from  "The  Economics  of  Retaihng")  in  regard  to  any 
product.  Data  on  the  per  capita  consumption  is  necessary, 
most  sales  managers  agree,  to  the  most  effective  planning  of 
selling  and  advertising  drives. 

CONSUMPTION  PER  CAPITA 

Sugar pounds    81.6  Cotton pounds  20.0 

Coffee pounds     10.0  Tobacco.  .  .pounds      5.7 

Cocoa pounds       1 .  25        Soda  water $1 .  20 

Tea pounds       1.4  Crackers $1.00 

Shoes $8 .  44        Flavoring  extracts .  $1 .  00 


Wool pounds       5 .  25 


RETAIL  DATA  AND  FIGURES 


SOME  ESTIMATED  PER  CAPITA  CONSUMPTIONS 
IN  THE  UNITED  STATES 

Percentage  of 
increase  or 
Per  capita   decrease  since 

Line  consumption         1875 

Wheat bushels  6.48  +86.1 

Corn bushels  27.3  +  52.5 

Sugar pounds  79.9  4-107.9 

Wool pounds  6.32  -f-  59.2 

Cotton pounds  24.8  +144.5 

Coffee pounds  9.33  +  28.7 

Tea pounds  0.89  +  38.2 

Rice pounds  5.24  —21.4 

Bread loaves  52.7  —41.8 

Flour  and  meal pounds  142.13  +43.7 

Fresh  beef pounds  73 . 1  +  59 . 3 

Salt  beef pounds  11.5  +21.4 

Fresh  pork pounds  23.7  +  61.2 

Saltpork pounds  23.1  +18.4 

Othermeat pounds  16.2  +72.3 

Poultry pounds  14 . 1  +  49 . 2 

Fish pounds  16.6  +  33.4 

Eggs dozens  17.7  +62.4 

Milk quarts  74.1  +  43.7 

Butter pounds  24.4  +54.3 

Cheese pounds  3.3  +12.4 

Lard pounds  17.5  +18.7 

Molasses gallons  0.75  +  13.2 

Potatoes bushels  3.1  +18.1 

Fruits $4.26  +52.3 

Men's  clothing  (per  adult  male)..  $27.77  +49.7 
Women's    clothing    (per    adult 

woman) $20.37  +  54.3 

Children's    clothing    (per    child 

under  10) $3.05  +65.9 

Fuel $8.01  +43.7 

Lighting $2.03  +37.2 

Furniture $8.33  +63.8 

Books  and  papers $  2 .  05  +  72 . 5 

Life  insurance $  6 .  67  +  71 .3 

Malt  liquors gallons  19.75  +185.5 

Tobacco $8.44  +85.2 


GRAPHIC  SALES  ANALYSIS 


INCOME  TAXES 

The  total  of  income  taxes  as  shown  here  are  the  latest 
available  on  publication  of  this  book.  New  York  leads  all 
the  others,  both  in  corporation  and  individual  taxes. 

States  Corporation  Individual 

Alabama $       887,906.92     $       200,385.29 

Alaska 49,132.34  20,772.03 

Arizona 637,993.92  200,330.75 

Arkansas 306,310.84  179,413.47 

California 6,147,289 .  14  3,870,314 .  24 

Colorado 1,789,597.94  1,060,075.91 

Connecticut 3,872,638 .  48  3,050,912 .  00 

Delaware 2,791,067 .  72  3,666,351 .  92 

District  of  Columbia 579,311.46  1,186,133.33 

Florida 227,655.04  305,879.91 

Georgia 1,218,831.39  611,777.89 

Hawaii 909,818.58  363,880.70 

Idaho 217,479.58  176,711.97 

Illinois 14,359,537.16  11,739,952.41 

Indiana 2,261,049 .  58  1,233,845 .  52 

Iowa 1,252,297.30  555,247.24 

Kansas 2,349,847.01  568,181.91 

Kentucky 1,252,485.55  393,271.63 

Louisiana 1,269,121.11  813,542.12 

Maine 815,750.20  377,375.05 

Maryland 1,401,954.27  1,947,336.47 

Massachusetts 9,320,716.63  10,959,847.50 

Michigan 6,565,769 .  68  3,627,884 .  25 

Minnesota 4,618,464.76  1,814,431.33 

Mississippi 246,829 .  38  197,456 .  70 

Missouri 4,596,170.35  2,516,416.54 

Montana 776,719.99  298,627.47 

Nebraska 779,615 .  94  368,710 .  97 

Nevada 75,423.06  15,425.53 

New  Hampshire 283,937 .  07  236,565 .  38 

New  Jersey 5,250,581 .  86  5,621,910 .  08 

New  Mexico 300,134.14  82,760.87 

New  York 46,566,951 .  90  81,495,783 .  31 

North  Carolina 1,232,609 .  13  551,189 .  51 

North  Dakota 218,771 .  77  74,159 .  64 

Ohio 12,873,403.13  8,066,088.77 

Oklahoma 2,231,436.18  4,428,842.32 


RETAIL  DATA  AND  FIGURES 


INCOME  TAXES,  Continued 

States                                   Corporation  Individual 

Oregon $       406,931.70  413,684.24 

Pennsylvania 24,238,266 .  36  17,860,341 .  18 

Rhode  Island 1,339,290.50  1,860,676.67 

South  Carolina 498,116. 17  81,874.28 

South  Dakota 182,248 .  15  49, 164 .  33 

Tennessee 942,090 .  87  438,684 .  27 

Texas 2,611,153.93  2,781,779.69 

Utah 1,148,676.94  181,344.05 

Vermont 184,547 .  33  369,879. 07 

Virginia 1,837,125.64  621,507.06 

Washington 1,187,702.79  855,286.77 

West  Virginia 1,460,908.97  460,138.63 

Wisconsin 2,716,523 .  54  1,179,826 .  21 

Wyoming 184,694.47  66,361.72 

Total $179,572,887.86     $180,108,340.10 

An  annual  report  of  the  Commissioner  of  Internal  Revenue 
shows  the  following  incomes  that  paid  fees  under  the  income 
tax  law.  Taxes  were  paid  to  the  Government  by  357,515 
persons.  Of  this  number,  282,806  were  married  men, 
51,729  were  single  men,  22,980  were  single  women,  and 
3,985  were  married  women  who  made  separate  returns. 

FEDERAL  INCOME  TAX  PAYERS 

(Incomes  that  paid  tax) 

174  incomes  exceeding  $500,000 

69  between  $400,000  and  $500,000 

147  between  $300,000  and  $400,000 

130  between  $250,000  and  $300,000 

233  between  $200,000  and  $250,000 

406  between  $150,000  and  $200,000 

1,189  between  $100,000  and  $150,000 

1,501  between  $  75,000  and  $100,000 

3,660  between  $  50,000  and  $  75,000 

3,185  between  $  40,000  and  $  50,000 

6,008  between  $  30,000  and  $  40,000 

5,483  between  $  25,000  and  $  30,000 

8,672  between  $  20,000  and  $  25,000 

16,790  between  $  15,000  and  $  20,000 


GRAPHIC  SALES  ANALYSIS 


FEDERAL  INCOME  TAX  PAYERS,  Continued 

(Incomes  that  paid  tax) 

34,141  between  $  10,000  and  $  15,000 

127,448  between  $    5,000  and  S  10,000 

66,525  between  $    4,000  and  S     5,000 

82,754  between  $     3,000  and  $     4,000 

How  do  American  families  spend  their  incomes?  Until  a 
few  years  ago  luxuries  were  "in  the  limelight."  Then  came 
a  period  when  American  families  bought  few  luxuries,  and 
the  necessities  of  life  were  primar3\  Then  again  came  an 
unusual  demand  for  luxuries,  and  with  it,  what  many  termed 
a  disregard  for  the  necessities.  Where  will  it  stop?  What 
will  the  demand  be  in  the  years  to  come — for  necessities  or 
for  luxuries? 

If  merchandise  is  to  have  in  it  a  selling  idea,  according  to 
some  progressive  business  men,  it  must  represent  utility. 
It  may  be  interesting,  therefore,  to  see  in  this  table  just 
how  American  families  are  spending  their  incomes.  Luxuries 
are,  of  course,  included  under  the  miscellaneous  column. 

PERCENTAGE  OF  TOTAL  EXPENDITURES 

Mis- 
Fuel      eel- 
Cloth-  and      lane- 
Food     ing     Rent    light      ous 

Under  $200 50.9  8.7  16.9  8.0  15.6 

$    200  up  to  $    300 47.3  8.7  18.0  7.2  18.8 

300upto       400 48.1  10.0  18.7  7.1  16.1 

400upto       500 46.9  11.4  18.6  6.7  16.5 

500  up  to       600 46.2  12.0  18.4  6.2  17.2 

600  up  to       700 43.5  12.9  18.5  5.8  19.4 

700upto       800 41.4  13.5  18.1  5.3  21.6 

800upto       900 41.4  13.6  17.1  5.0  23.0 

900upto    1,000 39.9  14.4  17.6  5.0  23.2 

l,000upto    1,100 38.8  15.1  17.5  4.9  23.7 

l,100upto    1,200 37.7  14.9  16.6  4.7  26.1 

1,200  and  over 36.5  15.7  17.4  5.0  25.4 

Average 43.1  13.0  18.1  5.7  20.1 

(Investigated  by  the  United  States  Bureau  of  Labor) 


RETAIL  DATA  AND  FIGURES 


BUYING 
Analysis  of  Expenses  of  an  Average  American  Family* 

Fresh  beef $  50.25 

Salt  beef 5.26 

Fresh  hog  products 14 .  02 

Salt  hog  products 13 .  89 

Vinegar  and  pickles 4.12 

Other  food 20.40 

Other  meat 9.78 

Poultry 9.49 

Fish 8.01 

Eggs 16.79 

Milk 21 .32 

Butter 28 .  76 

Cheese 2.62 

Lard 9.35 

Tea  and  Coffee 16 .  04 

Sugar 15.76 

Molasses 1 .  69 

Flour  and  meal 16 .  76 

Bread 12.44 

Potatoes 12 .  93 

Other  vegetables 20.90 

Fruit 16 .  52 

Rent. 99 .53 

Principal  and  interest  on  mortgage 12 .  15 

Taxes 5.75 

Insurance 20 .  98 

Fuel  and  lighting 40. 36 

Lighting 8.15 

Clothing 107 .90 

Organization  fees 8 .  90 

Religious  purposes 7 .  60 

Charity 2.39 

Furniture  and  utensils 26 .  28 

Amusements  and  vacations 12 .  30 

Books  and  newspapers 8 .  38 

Intoxicating  liquors 12.45 

Tobacco 10.91 

Sickness  and  death 20 .  52 

Other  purposes 45 .  14 

Total  for  all  purposes $768.64 

♦From  the  Eighteenth  Annual  Labor  Report  of  the  United  States  Bureau  of  Labor. 


"POURING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govem- 
ment*s  needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbolize  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  PubUca- 
tions  are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  laiew 
so  well  during  the  war. 


ORGANIZING  FOR 
INCREASED  BUSINESS 


Edited  by  THE  BUREAU  OF  BUSINESS  STANDARDS 
ofthmA.W,  SHAW  COMPANY 


SECTION  12 

Data,  Figures  and  Graphs  that 
Help  Sell  Your  Full  Market 


PRODUCTION  DATA  AND  FIGURES 
WHICH  HELP  IN  SELLING 

THE  saying,  "figures  never  lie,"  is  not   strictly 
true,  you  will  agree.     Figures  may  be  made  to 
misrepresent,  but  they  may  also  be  made  a  most 
effective  method  for  ''taking  the  pulse"  of  a  business. 

Statistics  are  dry — no  question  about  that — but 
their  dryness  usually  is  most  clearly  apparent  to  the 
man  who  lacks  imagination  with  which  to  picture  the 
conditions  reflected  by  the  figures.  Figures  plus  imagi- 
nation will  usually  prove  mighty  interesting  to  any  nian 
who  is  actively  associated  with  the  business  from  which 
the  figures  were  derived. 

Most  sales  executives  who  have  taken  up  the  study 
of  statistics  as  an  aid  in  solving  problems  of  sales 
management  are  enthusiastic  about  them.  By  means 
of  figures  they  are  able,  they  declare,  to  observe  business 
tendencies  more  accurately  than  before,  and  to  take 
advantage  of  their  full  significance.  Parallel  sets  of 
figures — one  a  standard  or  normal,  against  which  the 
other  set  of  actual  figures  may  be  compared— show  up 
weak  spots  in  methods  unerringly,  as  a  rule. 

The  purpose  in  this  section  is  to  present  statistics 
of  value  to  business  in  all  lines  and  localities.  The 
task  has  been  one  of  elimination — to  discard  figures 
which  held  out  no  particular  advantage  to  business 
men.  For  a  man  may  get  up  a  set  of  figures,  if  he 
wishes,  on  almost  any  conceivable  subject,  and  be 
scarcely  better  off  than  he  was  before. 

1 

Copyright.  1921,  by 

by  A.  W.  SHAW  COMPANY 

as  a  part  of  the  ."-haw  S  lling  Periea 


GRAPHIC  SALES  ANALYSIS 


Here,  on  the  other  hand,  each  table  of  figures  has 
been  subjected  to  the  tests  of  utihty  and  interest  to 
those  who  read  these  bulletins.  These  figures  are  an 
assembling  of  facts  in  the  form  of  numbers  and  per- 
centages, which  have  a  bearing  upon  the  methods  and 
policies  described  in  the  other  sections.  They  may  be 
of  direct  value  to  you,  or  they  may  suggest  how  you 
may  draw  up,  easily  and  quickly,  similar  information 
about  your  own  business.  In  either  event,  they  perform 
a  most  useful  function. 


PRODUCTION  DATA  AND  COST  FIGURES 

Have  you  ever  wondered  if  there  are  figures  available  on 
the  business  death  rate  of  manufacturing  concerns  more  or 
less  like  those  on  the  death  rate  among  men  and  women? 
Here  are  some  interesting  figures  of  this  sort,  based  on  care- 
ful first-hand  investigation.  These  figures  are  important  in 
judging  any  production  problem — for  they  indicate  the 
importance  of  knowing  all  the  facts,  of  carefully  allowing 
for  all  eventualities,  before  the  cost  of  producing  is  finally 
settled  upon.  Production  plans  undertaken  without  full 
knowledge  of  all  that  may  be  ahead  explain  a  large  part  of 
the  business  death  rate. 


DEATH  RATE  OF  MANUFACTURING  CONCERNS 

(The  rate  is  given  as  the  percentage  of  failures  to 
total  in  the  business  during  a  period  of  30  years) 

Line  Rate 

1.  Furniture 53.7% 

2.  Flour  and  grist  mill  products 53.0% 

3.  Iron-works   products 58.9% 

4.  Printing 48.2% 

5.  Lumber  and  timber  products 75.0% 

6.  Boots  and  shoes 57 .  l%i 

7.  Cigars  and  tobacco 75 .4% 

8.  Hosiery  and  knit  goods 30.0% 

9.  Creamery  products 56 . 5% 

10.  Brass,  bronze,  and  copper  products 52. 1% 

11.  Clothing 43.3% 

12.  Drugs  68. 1% 

13.  Automobiles 57. 1% 

14.  Carriages  and  wagons 71.6% 

Death  rate  for  14  leading  lines 57.1% 

Death  rate  for  199  other  lines 66.9% 

Death  rate  for  1,327  factories  in  213  lines.  .  62.0% 

3 


GRAPHIC  SALES  ANALYSIS 


DEATH  RATES  BY  "GENERATIONS"  FOR 
14  MANUFACTURING  LINES 

(Percentage  of  total  concerns  which  died  within  each  5- 
year  period) 

Line                        1891  1896  1901       1906       1911 

Furniture 62%  25%  58%       39%       45% 

Flour  and  grist  mills  16%  33%        

Iron-works 44%  33%  44%       50%       50% 

Printing 33%  60%  33%       40%       40% 

Lumber  and  timber  60%  75%  66%       66%       50% 

Boots  and  shoes 50%        

Cigars  and  tobacco..  52%  62%  63%  45%  77% 
Hosiery  and  knit 

goods ....        33%        

Creamery  goods....  100%  60%  100%  75%  50% 
Brass,    copper,   and 

bronze 75%  50%  66%       50%       40%, 

Clothing 33%  50%        14%       42% 

Drugs 66%  80%  90%       33%       80% 

Automobiles 100% 

Carriages  and 

wagons 63%  92%  41%       33%       20% 

EXPECTANCY  OF  LIFE  FOR  A  NEW 
MANUFACTURING  BUSINESS 

In  business  5  years  or  less 6 

In  business  between  5  and  10  years 4 

In  business  between  10  and  15  years 5 

In  business  between  15  and  20  years 1 

In  business  between  20  and  25  years 0 

In  business  between  25  and  30  years 0 

MORTALITY  FOR  33  PLANTS 

In  business  5  years  or  less 17 

In  business  between  5  and  10  years 5 

In  business  between  10  and  15  years 5 

In  business  between  15  and  20  years 2 

In  business  between  20  and  25  years 1 

In  business  between  25  and  30  years 0 


PRODUCTTON  DATA  AND  FIGURES  5 

These  tables  are  based  on  figures  showing  the  number  of 
concerns  that  "died"  in  less  than  30  years.  Wholesale  and 
retail  chances  for  life,  as  indicated  by  figures  secured  through 
investigation  in  these  lines  are  shown  in  Section  11  of 
these  bulletins  and  should  bo  referred  to  in  analyzing  these 
figures. 


HOW  LONG  WILL  IMY  FACTORY  PROBABLY  LIVE? 

Chances  in  10  to  live 
Line  10  Years    15  Years 

Furniture 5.0  4.2 

Flour  and  grist  mills 8.1  5.4 

Iron  works 5.6  5.0 

Printing 5.7  4.2 

Lumber  and  timber 3.4  2.0 

Boots  and  shoes 7.1  4.2 

Cigars  and  tobacco 4.3  2.9 

Hosiery  and  knit  goods 8.3  6.6 

Creamery  goods 2.5  2.5 

Brass,  bronze,  and  copper 3.5  2.8 

Clothing 6.6  3.3 

Drugs 2.8  2.8 

Close  analysis  of  business  mortality  figures  suggests  that 
the  rate  is  increasing  somewhat.  It  is  quite  obvious,  of 
course,  that  keener  competition,  increasing  costs  of  doing 
business  and  more  constantly  fluctuating  market  conditions 
are  in  large  measure  responsible  for  this  increase  because 
they  are  more  uncertain  factors  today  that  they  were  10  or 
15  years  ago.  While  many  concerns  are  "safe,"  to  all 
intents  and  purposes,  no  business  need  feel  wholly  secure. 
It  is  too  easy  to  skid. 

DETAILED  "DEATH  RATE"  RECORD  OF 
FACTORIES  INVESTIGATED 

In  business  5  years  or  less 123 

In  business  between  5  and  10  years 26 

In  business  between  10  and  15  years 8 

In  business  between  15  and  20  years 1 

In  business  between  20  and  25  years 3 

In  business  between  25  and  30  years 0 


CAUSES  FOR 

BUSINESS  DEATHS 

MANUFACTURING 

Inflexible  advertising  policies 

One-man  domination 

Carelessness  in  making  contracts 

Overlooking  new  demands 

Neglect  of  established  line 

Poor  fire  protection 

Unwise  experimentation 

Unstandardized  product 

Concentration  on  unprofitable  line 

Interference  of  stockholders 

Exorbitant  overhead  expense 

Lack  of  systematic  methods 

Diffused  attention 

Difficulties  in  getting  raw  materials 

Heavy  borrowing 

Not  investigating  market  before  starting 

Over-production 

Bad  buying 

Poor  design 

Too  much  waste  and  spoilage 

Inexperience 

Trying  to  change  market  to  fit  product, 

Lack  of  capital 

rather  than  product  to  fit  market 

Poor  equipment 

Too  much  competition 

Building  on  another's  reputation 

Antiquated  selling  methods 

WHOLESALE 

Eagerness  for  big  profits 

Lack  of  supply  for  private  brands 

Lack  of  organization  by  lines 

Indiscriminate  extension  of  credit 

Failure  to  cooperate  with  other  lines 

Failure  to  foresee  changes  in  style 

Too  much  competition 

Poor  collection  methods 

Failure  to  advertise 

Unwillingness  to  help  the  retailer 

Overbuying 

Handling  inadequately  advertised  lines 

RETAIL 

Failure  to  investigate  the  trade 

Undue  eagerness  to  make  a  big  splurge 

Unwise  selection  of  clerks 

Labor  difficulties 

Failure  to  build  a  store  personality 

Bad  health 

Ignorance  of  overhead  expense 

Failure  to  take  a  legitimate  profit 

Bad  accounting  and  poor  coiiections 

Poor  stocks 

Overbuying 

Increasing  cost  of  doing  business 

Cut-rate  competition 

Poor  equipment 

Poor  delivery  system 

Unsupported  advertising 

Lack  of  capital 

Small  margin  of  profit 

Poor  location 

Returned  goods 

Figure  1:  These  are  some  of  the  leading  causes  for  failure  in  the 
locality  investigated  among  the  three  classes  of  business.  Each  cause 
has  accounted  directly  for  a  number  of  failures.  Frequently  it  was 
found  that  failure  resulted  from  a  combination  of  several  causes. 


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Figure  2 :  To  be  sure  that  its  business  is  receiving  a  proper  volume 
of  inquiries,  and  that  the  strength  of  the  follow-up  is  right,  one  concern 
uses  the  graphs  shown  above,  and  also  those  shown  in  Figures  2  and  3. 


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Figure  3 :  Sales  are  plotted  on  this  Figure  4:  On  the  18th  of  March, 
monthly  chart,  which  compares  re-  as  this  chart  shows,  sales  were  sev- 
sults  with  those  of  previous  years.       en  days  ahead  of  the  previous  year. 

7 


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Figure  5:  This  record  gives  a  cu-  Figure  6:  Another  record  shows 
mulative  record  of  the  total  sales  "gross  income,"  other  than  from 
for  a  number  of  years  by  months.       sales,    cumulatively    by   months. 


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Figure  7:  To  interpret  sales  flue-  Figure  8:  This  chart  showed  that 
tuation,  the  advertising  costs  are  1918  sales  were  running  like  those 
kept  cumulatively  for  each  year,      of  1915  and  helped  check  a  slump. 

8 


PRODUCTION  DATA  AND  FIGURES  9 

INDUSTRIES  AND  MANUFACTURERS  PER  CAPITA 

FIGURES  BY  LINES 

(Population  estimated  98,000,000) 

Line  Number    Capita  Ratio 

Artificial  stone  products 3,548  27,621 

Bookbinding  and  blankbook-making  1,124  87,189 

Boots  and  shoes 1,355  72,325 

Bread  and  other  bakery  products. . .  25,963  3,778 

Brick,  tile,  and  pottery 3,634  26,968 

Butter 4,356  22,498 

Canning  and  preserving  fruits  and 

vegetables 3,153  31,113 

Carriages  and  wagons 4,601  21,300 

Cheese 3,082  31,797 

Clothing  (men's) 4,830  20,293 

Clothing  (women's) 5,564  17,613 

Confectionery 2,391  40,987 

Cooperage 1,259  77,751 

Copper,  tin,  and  sheet-iron  work .  .  .  4,527  21,648 

Cotton  goods 1,220  80,328 

Electrical  machinery  and  apparatus  1,030  95,146 

Flour-  and  grist-mill 10,788  9,084 

Foundry  and  machine-shop  products  14,446  6,784 

Fur  goods 1,322  74,130 

Furniture 3,192  30,701 

Gas  (illuminating  and  heating) 1,284  76,324 

Hosiery  and  knit  goods 1,622  60,419 

Ice  (manufactured) 2,543  38,580 

Jewelry 1,914  51,202 

Liquors  (malt) 1,250  78,400 

Lumber  and  timber  products 27,249  3,596 

Lumber  (planing  mill  products) .  . .  6,061  16,151 

Marble  and  stone  work 4,901  19,995 

Mattresses  and  spring  beds 1,000  98,000 

Millinery  and  lace  goods 2,079  47,138 

Mineral  and  soda  waters 5,463  17,939 

Patent  medicines  and  compounds. . .  2,903  33,755 

PrintingandpubUshing(bookandjob)  12,115  8,089 
Printing  and  publishing  (newspaper 

and  periodicals) 19,317  5,073 

Saddlery  and  harness 2,551  38,416 

Ship-  and  boat-building  (wooden) . .  1,068  91,760 

Slaughtering  and  meat-packing 1,279  76,622 


jO_ GRAPHIC  SALES  ANALYSIS 

Line,  continued  Number  Capita  Ratio 
Structural   ironwork    (not  made  in 

steel-works  or  rolling-mills) 1,235  71,255 

Tobacco,  cigars,  and  cigarets 13,515  7,251 

Turpentine  and  rosin 1,394  71,011 

You  will  find  in  the  group  of  tables  on  the  pages 
immediately  following  a  number  of  ideas  useful  in,  or 
adaptable  to,  many  lines  of  business.  Probably  yours 
is  among  them. 

These  tables  are  taken  from  "The  Wool  Industry," 
a  Shaw  pubhcation  by  Professor  P.  T.  Cherington,  and 
cover  various  phases  of  the  wool  industry. 

For  business  men  in  other  lines  the  usefulness  of  these 
statistics  lies  chiefly  in  the  tendencies  they  indicate. 
For  example,  take  this  quotation  from  the  preface: 

"Early  in  this  investigation  it  was  observed  that  the 
characteristics  of  the  woolen  and  worsted  industries 
are  determined,  not  so  much  by  problems  of  raw 
material  supply,  or  of  cloth  production,  as  by  the 
problems  involved  in  marketing  the  finished  fabrics. 
It  became  evident,  for  example,  that  the  present 
relative  importance  of  the  output  of  worsteds  as  com- 
pared with  woolens  is  not  due  to  the  greater  number 
of  sheep  being  grown  which  produce  wool  suitable  for 
such  fabrics.  On  the  contrary,  it  appeared  that  what- 
ever connection  exists  between  these  phenomena,  the 
change  in  the  character  of  the  demand  for  fabrics  is 
the  cause,  and  the  change  in  the  character  of  wool- 
growing  the  effect  rather  than  vice  versa.  Again,  the 
large  scale  of  the  worsted  mills  and  their  marked  geo- 
graphic concentration  seem  to  be  largely  due  to  the 
conditions  under  which  staple  worsteds  are  sold.  In 
other  words,  it  was  plain  that  in  both  the  woolen  and 
worsted  industries  the  casual  forces  in  the  develop- 
ment of  the  production  activities  are  the  wants  and 
habits  of  the  buying  public." 


PRODUCTION  DATA  AND  FIGURES 


11 


There  you  liave  it — the  ultimate  consumer  is  the 
"boss"  even  of  the  largest  trade  and  industrial  devel- 
opments and  tendencies.  The  manufacturer  and  dis- 
tributor may  have  a  lot  to  do,  of  course,  with  shaping 
his  needs  and  habits,  but  that  is  another  question. 


Carrying  further  the  analysis  of  wool  establishments,  we 
have  here  a  table  with  some  features  of  the  concentration 
by  states.  These  figures  are  taken  from  the  census  in  the 
Tariff  Board  Reports. 

Number 
of  estab- 
lishments 

United  States 587 

Connecticut 36 

Maine 55 

Massachusetts 94 

New  Hampshire 33 

New  York 30 

Pennsylvania 104 

Rhode  Island 21 

All  others 214 


Cost  of 

Product 

materials 

value 

(millions) 

(millions) 

$65.6 

$107.1 

5.1 

8.4 

7.6 

12.8 

19.8 

32.2 

4.7 

7.7 

2.9 

4.9 

10.2 

16.0 

2.9 

4.7 

12.1 

20.1 

The  rapid  growth  of  worsted  manufacture  is  shown  in  this 
table,  also  reproduced  from  the  census  contained  in  the 
Tariff  Board  Reports.  Note  the  tremendous  increases  all 
along  the  line  during  a  period  of  50  years. 


1909     1904     1899     1889     1879  1869  1859 
324       226       186       143         76     102       3 


Number  of  es- 
tablishments 
Capital  (mil- 
lions)        $295  $162.4  $132.1 

Combing  ma- 
chines 

(number)..     1,925    1,312    1,194 
Spindles 

(thousands;     2,624    1,618    1,371 
Looms  (num- 
ber)   45,270  30,910  26,372  1,909  5,144  116,128 


$68 

$20.3 

$10  i 

673 

288 

161. 

755 

240 

200. 

1.2 


12 


GRAPHIC  SALES  ANALYSIS 


1909     1904     1899     1889    1879     1869  1859 

Value  of  ma- 
terials (mil- 
lions)   $207.7  $109.6       $77    $50.7   $22     $14.3  $2.4 

Value  of  pro- 
duct (mil- 
lions)   $312.6  $105.7  $120.3    $79.1    $33.5     $22  $3.7 

How  worsted  establishments  are  concentrated  by  states  is 
shown  here.  Comparison  of  this  table  with  that  on  page  9, 
shows  that  worsted  manufacture  is  confined  to  a  few  states 
to  a  greater  extent  than  is  ordinary  woolen  manufacture. 
Three  cities  alone — Lawrence  (Massachusetts),  Providence, 
and  Philadelphia — produce  the  greater  part  of  the  output. 


Number 
of  estab- 
lishments 

United  States 324 

Connecticut 17 

Massachusetts 74 

New  Jersey 21 

New  York 15 

Pennsylvania 99 

Rhode  Island 67 

All  others 31 


Cost  of 

Product 

materials 

value 

(millions) 

(millions) 

$207.7 

$312.6 

7.1 

10.1 

66.0 

106.0 

18.3 

29.6 

8.2 

12.7 

43.3 

59.4 

48.1 

69.8 

16.5 

24.6 

The  total  amount  of  fine  wool  retained  in  the  United 
States  for  consumption  during  the  10  years  ending  with 
the  first  of  the  year  1915,  and  the  percentage  of  these 
totals  represented  by  imported  wools,  is  given  in  this  table 
prepared  by  the  National  Association  of  Wool  Manufacturers. 

FINE  WOOL 

Retained  for  Percentage 

Fiscal                                               consumption  of 

year                                               (million  pounds)  imports 

1904-05 426  31.54 

1905-06 393  24.99 

1906-07 390  23. 50 

1907-08 346  16.71 


rRODUCTIQN  DATA  AND  FIGURES  13 

FINE  WOOL,  Continued 

Retained  for  Percentage 

Fiscal                                                   consumption  of 

year                                               (million  pounds)  imports 

1908-09 476  34.60 

1909-10 467  29.90 

1910-11 366  12.38 

1911-12 404  21.02 

1912-13 384  21.00 

1913-14 441  32.84 

1914-15 526  44.91 

Examination  of  this  table  makes  clear  the  connection 
between  the  scale  of  operation  and  the  nature  of  the  two 
great  groups  of  products,  staples,  and  novelties.  For  example, 
by  comparing  the  yardage  of  worsted  serges  and  the  other 
chief  worsted  items  with  the  yardage  of  woolens  having  the 
largest  totals,  and  by  observing  how  many  more  groups  of 
products  are  necessary  for  listing  woolen  mill  products  than 
worsteds,  it  is  easier  to  understand  why  large-volume  plants 
have  so  much  more  important  a  place  in  the  worsted  than 
in  the  woolen  industry. 

Woolen  Industry      Worsted  Industry 
Items  Sq.  yds.       Value       Sq.  yds.       Value 

(milhons)  (millions)  (millions)  (millions) 
All  wool: 

Wool  cloth  and 

men'swear...     35.1         $24.5  5.7  $4.7 

Worsted  coat- 
ings, serges, 
and  suitings, 

men'swear...       5.0  4.3        114.5  97.5 

Woolen  over- 
coatings, cloak- 
ings,  and  so  on, 
men's  or 

women's  wear. .     13.6  10.2  1.0  1.0 

Worsted  overcoat- 
ings and  cloakings, 
men's  or  women's 
wear 1  ,2  .4  .5 


14 GRAPHIC  SALES  ANALYSIS 

Woolen  Industry      Worsted  Industry 
Items,  Sq.  yds.       Value       Sq.  yds.       Value 

continued  (millions)   (millions)  (millions)   (millions) 

Wool  dress  goods 
and  so  on,  opera 
and  similar  flan- 
nels and  similar 
all  wool  dress 

goods 25.5  13.7  3.5  2.6 

Worsted  dress 
goods,  cashmeres, 
and  so  on,  for 
women's  wear  and 

buntings 1.9  1.1         103.8  52.0 

Carriage  cloths ....       1.2  .6  ....  .... 

Flannels  for  under- 
wear        3.3  .9  

Blankets 4.4  2.5 

Mohair  dress  goods     ....  ....  .3  .1 

All  other  all  wool..  .9  .5  1.8  1.3 

Cotton  mixed 

woven  goods : 

Cotton    mixed 

woven  goods, 

total  all    types     3.6  1.6 

Union  tweeds, 
cassimeres, 
cheviots,  etc., 

for  men's  wear .     15.3  6.2  

Overcoatings  and 

cloakings 4.2  2.3  ....  .... 

Sacking,  tricots, 
dress  goods  for 
women's  wear,  and 
opera  and  similar 

flannels 4.2  1.7  ....  

Flannels  for  under- 
wear        7.0  1.3  

Blankets 1.7  .6  

All  other  woolen 
mill  products — 
cotton  mixed 
woven  goods 1.1  .4  ....  .... 


15 

r 
is) 


INSERT  I 


in 

ba 
inj 
an 


m 

63 

id 


J       n        r -7--^    « 

"}    •    I   IMONII    NjD-    )    • 


Insert  I:  Whether  or  not  the  distribution  of  your  product  is 
based  on  density  of  population,  you  will  find  this  map  interest- 
ing. Each  dot  represents  500,000  people.  An  ordinary  map- 
and-tack    distribution  sometimes  is  confusing,  as  it  may  make 


certain  parts  of  the  country  appear  more  favored  than  others. 
This  map  forestalls  that  objection.  It  shows  how  the  United 
States  would  look  if  the  states  corresponded  in  size  to  their 
populations      A   comparison   of  the   "size"   of  states   such    as 


Massachusetts  and  Texas,  or  New  Jersey  and  Montana,  for 
examples,  on  a  population  basis,  presents  some  decidedly  inter- 
esting and  surprising  facts.  By  checking  sales  volume  against 
this  map,  you  can  tell  if  your  distribution  is  what  it  should  be. 


x^i 


PRODUCTION  DATA  AND  FIGURES  15 

Woolen  Industry       Worsted  Industry 
Items,  Sq.  yds.       Value       Sq.  yds.       Value 

continued  (millions)  (millions)  (millions)  (millions) 

Cotton   warp 

woven  goods: 

Wool  filled  cassi- 

meres,  doeskins, 

jeans,  tweeds, 

and  so  on,  for 

men's  wear 44.0  11.0  1.1  ,8 

Worsted  filled 
cassimeres,  doe- 
skins, jeans, 
tweeds,  etc.,  for 

men's  wear 3.3  1.2  25.9  13.7 

Wool  filled  dress 
goods  and  similar 
goods    and  repel- 

lants 12.2  2.6  ......  .,.. 

Wool  filled  over- 
coatings and  cloak- 

ings 1.9  3.9  .....  

Worsted  filled  dress 
goods,  delaines, 
cashmeres,  and  so 
on,  and  stuffs  for 

women's  wear ....  64.4  14.5 

Domett    flannels 
and  shirtings ... .       4.5  .9  ....  .... 

Cotton  warp  blan- 
kets        8.9  2.5  

Horse  blankets. ...       4.1  1.6  

Carriage  robes ....       2.8  1.3  ....  

All  other  cotton 
warp  goods 8.1  1.3  1.9  .7 

Only  four  cities  in  the  United  States  are  prominent  in 
woolen  manufacture.  A  count  of  firms  indicated  as  handling 
woolen  or  worsted  goods,  classified  somewhat  roughly,  gives 
figures  as  shown  in  the  table  given  on  the  following  page. 
The  total  value  of  products  in  1905  was  S355,000,000,  and 
in  1910,  $485,000,000. 


14  GRA 


Items, 
continued 
Wool  dress  good 
and  so  on,  operj 
and  similar  flan 
nels  and  simila 
all  wool  dresi 

goods 

Worsted  dresi 
goods,  cashmeres 
and  80  on,  fo 
women's  wear  anc 

buntings 

Carriage  cloths. . . 
Flannels  for  under 

wear 

Blankets 

Mohair  dress  good 
All  other  all  wool . 
Cotton  mixed 

woven  goods 

Cotton    mixec 

woven  goods 

total  all    types 

Union  tweeds 

cassi  meres 

cheviots,  etc. 

for  men's  wear . 

Overcoatings  and 

cloakings 

Sacking,  tricots, 
dress  goods  foi 
women's  wear,  anc 
opera  and  similai 

flannels 

Flannels  for  under- 
wear   

Blankets 

All  other  wooler 
mill  products — 
cotton  mixed 
woven  goods 


PRODUCTION  DATA  AND  FIGURES  15 

Woolen  Industry       Worsted  Industry 

Items,  Sq.  yds.       Value       Sq.  yds.       Value 

continued  (millions)  (millions)  (millions)  (millions) 

Cotton   warp 

woven  goods: 

Wool  filled  cassi- 

meres,  doeskins, 

jeans,  tweeds, 

and  so  on,  for 

men's  wear 44.0  11.0  1.1  .8 

Worsted  filled 
cassimeres,  doe- 
skins, jeans, 
tweeds,  etc.,  for 

men's  wear. ...       3.3  1.2  25.9  13.7 

Wool  filled  dress 
goods  and  similar 
goods    and  repel- 

lants 12.2  2.6  ..,<.  ., .. 

Wool  filled  over- 
coatingsandcloak- 

ings 1.9  3.9  ...«•  

Worsted  filled  dress 
goods,  delaines, 
cashmeres,  and  so 
on,  and  stuffs  for 

women's  wear ....  64.4  14.6 

Domett    flannels 
and  shirtings ...  .       4.5  .9  ....  .... 

Cotton  warp  blan- 
kets        8.9  2.5  

Horse  blankets ....       4.1  1.6  

Carriage  robes ....       2.8  1.3  

All  other  cotton 
warp  goods 8.1  1.3  1.9  .7 

Only  four  cities  in  the  United  States  are  prominent  in 
woolen  manufacture.  A  count  of  firms  indicated  as  handling 
woolen  or  worsted  goods,  classified  somewhat  roughly,  gives 
figures  as  shown  in  the  table  given  on  the  following  page. 
The  total  value  of  products  in  1905  was  S355,000,000,  and 
in  1910,  $485,000,000. 


<fl 

XI 

Q. 

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C3 

1 

o 

^ 

ja 

m 

Ph 

O 

16  GRAPHIC  SALES  ANALYSIS 


WOOLEN  MANUFACTURERS 

o 

Type  of  Concern  ^ 

a> 

5 

Woolens  and  worsteds  alone 179      29       14        3 

Woolens  and  worsteds  combined  with 

other  lines 39        8        3        6 

Sales  offices  of  woolen  and  worsted 

mills 5        4        3        6 

Branches  of  houses  whose  head  offices 

are  elsewhere 14        2        2 

Head  offices  of  houses  with  branches 

in  various  cities 3        4 

Houses  handling  both  imported  and 

domestic  woolens  and  worsteds ....       14       

A  direct  count  of  concerns  manufacturing  men's  ready-to- 
wear  woolen  and  worsted  clothing,  shows  the  following  dis- 
tribution. You  will  note  that  certain  localities  have  special- 
ized in  certain  types  of  products. 

MEN'S  CLOTHING  MANUFACTURERS 


<a 


M 


Type  of  Product        %  |||||l1|f2^ 

Men's  clothing 236  60  42  32  ..   12  11  34  24    8    5 

Overcoats    and    rain- 
coats    20 1 1   . .    . . 

Men's  and  boys'  wear  13    6 10  . .     3  . .    . .     4 

Clothing  and  raincoats  10    5 3  . .     1 

Clothing  and  overcoats  20  14  ... .     1     3 3 

Boys'  clothing 127  10    7    4 11 

Pants 97  17  22    4  . .    . .     7  19    1  10  14 

Knee  pants 32  . .    ..     2    2 

Pants  and  knee  pants .     5 2  . . 


PRODUCTION  DATA  AND  FIGURES  17 

These  cost  figures  for  the  manufacture  of  clothing  in  1910 
show  separately  the  cost  of  cloth  and  the  cost  of  trimming. 
The  prices  given  in  the  top  line  are  average  selling  prices. 
Note  that  high-grade  clothing — selling  for  $15  and  up — is 
divided  into  two  classes,  A  and  B,  distinguished  not  so  much 
by  selling  prices  as  by  the  relative  emphasis  on  cloth  and 
material  cost  in  class  A,  as  against  the  emphasis  placed  on 
workmanship  and  the  consequent  labor  cost  of  manufactur- 
ing clothing  in  class  B. 

High  Grade 
Cheap  Medium  ($15  and  over) 
($8  and   ($8  to  Class    Class     Chil-  Special 
Items  under)      $15)       A  B        dren     order    Average 

Net  sales 100.0  100.0  100.0  100.0  100.0  100.0  100.0 

Material  cost: 

Cloth 47.1    36.8    34.1  26.6  35.0  33.2  35.4 

Trimmings..   13.7    17.1    18.4  15.8  17.1  9.8  16.6 

Freight 2  .3  .1  .1  .2 

Total 60.8    53.9    52.7  42.7  52.2  43.1  52.2 

Manufactur- 
ing cost : 

Direct  labor  21.0    23.2    23.4  28.5  25.7  25.8  23.8 

Factory  exp.     1.2     3.3      4.8  5.0  2.9  4.1  4.0 

Totalmfg.exp22.2    26.5    28.2    33.5    28.6    29.9    27.8 
Total  cost  of 
mnfd. 

clothing.  .   83.0  80.4  80.9  76.2  80.8  73.0  80.0 
General  over- 
head exp.: 

Sellingexp..     3.9  6.8  6.3  8.7  7.8  15.6  7.0 

General  exp.     30  3.9  3.7  3.2  5.2  8.6  4.0 

Total....     6.9  10.7  10.0  11.9  13.0  24.2  11.0 

Total  Cost....  89.9    91.1    90.9    88.1    93.8    97.2    91.0 
Profit 10.1      8.9      9.1    11.9      6.2      2.8      9.0 

A  trade  directory  gives  the  following  figures  covering  con- 
cerns producing  women's  woolen  and  worsted  clothing.  As 
in  the  men's  ready-to-wear  clothing  industry  the  contract 
system  figures  largely,  and  manufacture  is  generally  concen- 
trated in  large  eastern  cities. 


18 GRAPHIC  SALES  ANALYSIS 

WOMEN'S  CLOTHING  MANUFACTURERS 

.2      m 

o 

Type  of  Product            >^  ^   I  g 

^  .2   S  -^ 
^  O   pq  PQ 

Suits  and  cloaks 643  50  17  42 

Skirts  (woolen) 153  33  15  23 

Children's    cloaks    and 

suits 157 1   ....   15 

Auto    coats    and    rain 

coats 51   . .     2 


C3 

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CO 

1 

13 

24 

76 

5 

9 

27 

20 

4 

17 

The  figures  presented  in  the  following  tables  are  intended 
to  give  you  an  idea  of  the  amount  of  raw  materials  used  in 
the  manufacture  of  essential  products.  These  statistics  were 
compiled  by  the  United  States  Bureau  of  the  Census.  In 
some  instances  where  actual  consumption  figures  were  not 
available,  the  production  figures  are  given.  These  figures, 
of  course,  do  not  include  any  wastage  which  occurs  in  the 
manufacturing  process. 

COTTON  INDUSTRY 

(Cotton  goods,  including  cotton  small  wares) 

Material  Pounds 

Cotton 2,335,344,906 

Domestic 2,259,312,974 

Foreign 76,031,932 

Cotton  yarn 126,707,003 

Cotton  waste 80,044,061 

Starch 71,774,574 

HOSIERY  AND  KNIT  GOODS  INDUSTRY 
Material  Pounds 

Cotton 75,416,023 

Wool,  in  condition  purchased 7,068,788 

Equivalent  of  above  in  scoured  condition. . . .     5,582,839 


PRODUCTION  DATA  AND  FIGURES  19 

HOSIERY  AND  KNIT  GOODS  INDUSTRY 
(Continued) 
Material  Pounds 

Shoddy,  purchased 7,482,553 

Wool  waste  and  noils,  purchased 8,586,261 

Yarns,  purchased: 

Cotton 216,987,611 

Worsted 10,370,004 

Woolen 6,140,265 

Merino 4,014,609 

Silk  and  spun  silk 982,753 

Yarns  made  in  the  establishment  using — 

Cotton 69,171,277 

Woolen 8,316,349 

Worsted 223,404 

Merino 20,856,989 


WOOLEN  INDUSTRY 
(Exclusive  of  carpets  and  rugs) 
Material  Pounds 

Wool,  in  condition  purchased 488,368,690 

Domestic 320,298,916 

Foreign 168,069,774 

Equivalent  in  scoured  condition 301,004,252 

Hair 33,447,534 

Camel,  alpaca,  and  vicuna 4,659,409 

Mohair 3,187,950 

Domestic 2,444,561 

Foreign  (Turkish  and  so  on) 743,389 

Other  animal  hair 25,600,175 

Cotton 21,399,731 

Domestic 18,412,493 

Foreign  (Egyptian,  and  so  on) 2,987,238 

Tailors'  clippings  (rags,  and  so  on) 41,517,552 

Shoddy,  mungo  and  wool  extract,  purchased 24,052,730 

Waste  and  noils  of  wool,  mohair,  camel  hair,  and 

so  on,  purchased 32,629,812 

Wool  waste  and  noils 31,957,327 

Mohair  noils 604,985 

Camel,  alpaca,  and  vicuna  noils 67,500 


20 GRAPHIC  SALES  ANALYSIS 

SILK  INDUSTRY 
Material 

Silks  •  Pounds 

Raw 17,472,204 

Spun 2,112,972 

Artificial 914,494 

Organzine  and  tram,  purchased 3,377,972 

Fringe  and  floss,  including  waste,  noils,  and 
so  on  purchased 2,402,960 

Yarns,  other  than  silk: 

Cotton  (not  including  mercerized) 12,617,292 

Mercerized  cotton 1,494,586 

Woolen  or  worsted 610,588 

Mohair 710,108 

All  other 353,780 

IRON  AND  STEEL  INDUSTRY 
(Steel  Works  and  Rolling  Mills) 
Material  Tons 

Iron  and  steel : 

For  furnaces  and  hot  rolls — 

Pig  iron,  including  ferroalloys 19,076,889 

Pig  iron 18,712,304 

Ferroalloys — spiegeleisen,  ferromanga- 

nese,  and  so  on 364,585 

Scrap  from  outside  sources,  including  old  rails 

not  intended  for  rerolling 4,803,617 

Ingots,  blooms,  billets,  slabs,  and  muck  scrap 
bar,  rails  for  rerolhng,  and  sheet  and  tin 

plate  bars  (from  outside  sources) 6,508,249 

Rolled  forms  for  further  manufacture  (from 
outside  sources) — 

Skelp 176,717 

Wire  rods 146,425 

Iron  ore 835,338 

AGRICULTURAL  IMPLEMENT  INDUSTRY 
Product  Number  Produced 

Cultivators 908,297 

Harrows 700,820 

Plows 1,615,852 

Seeders 61,970 


MANUFACTURE  OF  AGRICULTURAL  IMPLEMENTS 


I  Chioigo 

>  MoUne 

S  Racuie 

t  Springfield  Ol 

5  Aubum  N  y 

6  Sa  Bcod,  fald 

7  Peoria,  ni 

^  Richmond  Ind 

9  Louisnlle.  Ky. 


»J4.S4«.M9  (1900) 
«,M7.014 
5.1  !7.079 
4.0J1.16J 
1,890.301 
2,744.001 
1.309.')63 
3.151,161 
1J37.388  (1900) 


Figure  9:  This  map  from  "Selling  Forces"  shows  how  the  manufac- 
ture of  agricultural  implements  is  distributed.  It  is  interesting  to  note 
the  concentration  of  over  70%  of  this  industry  in  and  around  Chicago. 


^{jovernment   Map  5howina  ftrcentaqe  of  Increase   m  Population  Dun  n<j    10  Years 


JNCRLASI 
Unde:  10  7» 
10%  to  ^0% 
207.10  30% 
S  30%  to  50% 
□  50  7g  and  over 


Figure  10:  This  Government  map  shows  the  approximate  percentage 
of  increase  of  population  by  states,  in  a  recent  period.  Information  of 
this  sort  is  valuable  when  setting  quotas,  routing  SEilesmen,  and  so  oa. 

21 


Figure  1 1 :  Here  is  a  record  used  by  one  concern  to  control  produc- 
tion costs.  The  division  reproduced  above  shows  the  total  cost  of 
fuel  for  two  consecutive  years,  and  the  lower  one  the  unit  cost.  Similar 
divisions  show   all   the   other  items  that  enter  into  production  costs. 

22 


PRODUCTION  DATA  AND  FIGURES  23 

AGRICULTURAL  IMPLEMENT  INDUSTRY,  continued 
Product  Number  Produced 

Planters 366,448 

Drills 142,547 

Harvesting  implements 1,059,763 

Seed  separators 85,321 

Threshers 24,408 

SLAUGHTERING  AND  MEAT  PACKING  INDUSTRY 

Number 

Beeves '■ 13,611,422 

Calves 6,515,976 

Sheep  and  lambs 14,724,699 

Hogs 53,219,568 

All  others 287,150 

Total  for  the  United  States 88,358,815 

BUTTER,  CHEESE,  AND  CONDENSED  MILK  INDUSTRY 

Pounds 

Butter 624,764,653 

Cheese 311,126,317 

Condensed  milk 494,796,544 

SUGAR  Tons 

Cane  (crushed) 4,520,419 

Grown  on  plantations  controlled  by  mill-owners.  . .  .2,613,468 

Purchased 1,906,951 

Total 9,040,838 

Beets  treated 3,965,356 

FLOUR  AND  GRIST  MILL  INDUSTRY 
Material  Total  Production 

Wheat  flour bbls.     107,108,461 

Corn  meal  and  corn  flour bbls.      27,188,352 

Rye         bbls.        1,591,726 

Buckwheat lbs.    200,959,917 

Barley  meal lbs.      33,649,182 

Hominy  and  grits lbs.    837,333,466 

Feed tons        6,001,357 

Offal tons        4,175,173 


24 GRAPHIC  SALES  ANALYSIS 

GRAIN  (Ground) 
Material  Bushels 

Wheat 503,468,556 

Corn 244,547,967 

Rye 13,374,095 

Buckwheat 8,394,120 

Barley 30,639,401 

Oats 63,301,092 

Other  grains 9,225,512 

Total 872,950,743 

LUMBER  INDUSTRY 
Rough  lumber:  Quantity 

Total  (M  feet  board  measure) 44,509,761 

Softwoods 33,896,959 

Yellow  pine 16,277,185 

Western  pine 1,499,985 

White  pine 3,900,034 

Douglas  fir 4,856,378 

Hemlock 3,051,399 

Spruce 1,748,547 

Cypress 955,635 

Redwood 521,630 

Cedar 346,008 

All  other 740,158 

Hardwoods 10,612,802 

Oak 4,414,457 

Maple 1,106,604 

Red  gum 706,945 

Chestnut 663,891 

Birch 452,370 

Basswood 399,151 

Elm 347,456 

Cottonwood 265,600 

Ash 291,209 

Hickory 333,929 

Walnut 46,108 

Sycamore 56,511 

All  other 1,528,571 

Lath  (thousands) 3,703,195 

Shingles  (thousands) 14,907,371 


PRODUCTION  DATA  AND  FIGURES  25 

DYESTUFFS  AND  EXTRACTS 

Product  Pounds 

Artificial  dyestuffs 12,267,399 

Extracts: 

Hemlock. . . 12,588,078 

Logwood 22,317,248 

Oak  and  chestnut 287,908,285 

Sumac 3,148,790 

Ground  sumac 554,032 

Ground  bark 25,142,076 

Ground  and  chipped  wood 15,046,954 

Gums  and  dextrines 16,148,931 

Iron  liquors 3,079,418 

Mordants 1,735,887 

Sizes 54,054,711 

Tannic  acid 5,085,748 

Turkey-red  oil 1,048,719 

Chrome  tannage  solution 7,361,008 

Other  tanning  liquors 2,464,040 

PAINT  AND  VARNISH  INDUSTRY 

Product  Pounds 

White  lead 85,234,414 

Oxides  of  lead 63,404,846 

Lampblack 1,810,445 

Iron  oxides,  and  other  earth  colors 111,674,675 

Other  dry  colors 162,409,565 

Barytes 49,496,025 

Pulp  colors  (sold  moist) 28,435,722 

White  lead  in  oil 246,567,570 

Paste 162,356,330 

Mixed  for  use 33,272,033 

Oleoresinous  varnishes 18,476,523 

Dammar  and   similar  turpentine  and  benzine 

varnishes.. 3,481,231 

Spirit  varnishes,  other  than  turpentine 1,181,746 

Pyroxylin  varnishes 1,880,141 

Dryers,  japans,  and  lacquers 9,474,939 

All  other 4,238,097 

Liquid  fillers 1,159,569 

Paste 14,050,329 

Dry 50,983,472 

Putty 63,502,048 


26 GRAPHIC  SALES  ANALYSIS 

Product,  continued  Pounds 

Water  paints  and  calcimine  (dry  and  paste) . .  .     47,465,265 

Mixed  for  use 522,283 

Linseed  oil 3,477,004 

Bleached  shellac 3,014,195 

Total 1,167,668,467 

PETROLEUM  REFINING 

Product  Barrels 

Mid-continent  (Kansas  and  Oklahoma) 42,895,051 

Illinois 26,236,883 

Appalachian 24,508,218 

California 13,481,885 

Lima-Indiana 8,083,096 

Gulf  (Texas  and  Louisiana) 5,262,664 

Colorado 307,642 

Crude  petroleum,  total 120,775,439 

BOOT  AND  SHOE  INDUSTRY 
(Production  of  boots  and  shoes  for  leading  states) 

State  Number  of  pairs 

Massachusetts 118,009,926 

New  York 28,538,451 

Missouri 25,931,107 

New  Hampshire 25,534,114 

Ohio 18,908,915 

Pennsylvania 17,588,474 

Maine 9,275,102 

Illinois 8,295,805 

Wisconsin 7,296,629 

New  Jersey 6,154,954 

Virginia 4,255,236 

Minnesota 3,195,530 

Michigan 2,986,002 

All  other  states : .     9,046,936 

Total,  United  States 285,017,181 

LEATHER  INDUSTRY 
Product  Number 

Cattle  hides 18,360,415 

Skins 97,680,571 


INSERT  II 


Ir 

VJ 

ce 


Distribution  and  Production  Centers  of  tlie  United  States 


GENERAL 

1.  Population  center  of 
the  United  States. 

2.  Farm  center  of  the 
United  States. 

3.  Lead  and  zinc  center 

4.  Cotton  center 

5.  Copper  center, 

6.  Sheep  and  wool  cent 


7.  Wheat  cente 

8.  Cattle  center 

9.  Hog  center. 

10.  Corn  center. 

11.  Oat  center. 

12.  Rice  center. 

13.  Fruit  center. 

14.  Naval  stores, 

15.  Coal  center. 

16.  Iron  center. 


MANUFACTURE 

Printing  and  publishing;  men's  clothing;  tobacco;   bread    and 
other  bakery  products;  women's  clothing— New  York  City. 
Slaughtering  and  meat  packing— Jobbing  Center  of  the  United 
States— Chicago. 

Foundry  and  machine  shop;  iron  and  steel   works  and  rolling 
mills;  blast  furnaces— Pittsburgh. 
Lumber  and  timber — Washington  State. 
Flour— Minneapolis. 


Car  shops — Berwick,  Pa. 
Manufacturing  center  of  the  United  States. 
Breweries— St.  Louis. 
Carriages  and  wagons — South  Bend. 
Furniture— Grand  Rapids. 
Silk— Paterson. 


Insert  II:  The  map  reproduced  here  shows  how  the 
various  leading  industries  and  trades  are  localized  in 
certain  sections  of  the  country.  The  16  principal  pro- 
duction centers  in  the  United  States  are  indicated  by  the 


numerals  1,  2,  3,  and  so  on;  and  the  13  principal  pro- 
duction and  distribution  centers  are  designated  alpha- 
betically. The  key  givea  below  the  map  explains  just 
which  industry  is  the  leading  one  in  the  various  dis- 


tricts. Information  of  this  nature  is  not  merely  interest- 
ing to  know,  but  it  can  be  made  of  valuable  and  direct 
assistance  to  manufacturers  and  wholesalers  in  locating 
the  most  profitable  markets  for  their  various  products. 


PRODUCTIOX  DATA  AND  FIGURES  27 

Product,  continued  Number 

Calf  and  kid 19,732,638 

Goat dozens  4,006,472 

Sheep dozens  2,173,505 

AH  other 3,788,209 

Rough  leather  purchased : 

Whole  sides 1,468,213 

Grains,  sides 525,786 

AUTOMOBILE  INDUSTRY 
Class  and  State  Number 

All  classes 126,593 

Pleasure  and  family  vehicles 121,868 

Touring  cars 76,114 

Connecticut 2,165 

Illinois 2,059 

Indiana 6,838 

Massachusetts 2,063 

Michigan 43,855 

New  York 5,440 

Ohio 6,479 

Runabouts 36,204 

Connecticut 393 

Illinois 433 

Indiana 8,139 

Massachusetts 983 

Michigan 18,173 

New  York 1,097 

Ohio 2,900 

All  other  varieties 9,550 

IlHnois 470 

Indiana 2,104 

Michigan 1,855 

New  York 507 

Ohio 4,114 

Pennsylvania 67 

Business  vehicles 4,725 

Delivery  wagons 1,862 

Illinois 447 

Indiana 107 

Michigan 401 

New  York 139 


PIU^DT'CTION  DATA  AND  FIGURES  27 

Product,  continued  Number 

Calf  and  kid 19,732,638 

Goat dozens  4,006,472 

Sheep dozens  2,173,505 

All  other 3,788,209 

Rough  leather  purchased: 

Whole  sides 1,468,213 

Grains,  sides 525,786 

AUTOMOBILE  INDUSTRY 
Class  and  State  Number 

All  classes 126,593 

Pleasure  and  family  vehicles 121,868 

Touring  cars 76,114 

Connecticut 2,165 

lUinois 2,059 

Indiana 6,838 

Massachusetts 2,063 

Michigan 43,855 

New  York 5,440 

Ohio 6,479 

Runabouts 36,204 

Connecticut 393 

Illinois 433 

Indiana 8,139 

Massachusetts 983 

Michigan 18,173 

New  York 1,097 

Ohio 2,900 

All  other  varieties 9,550 

Illinois 470 

Indiana 2,104 

Michigan 1,855 

New  York 507 

Ohio 4,114 

Pennsylvania 67 

Business  vehicles 4,725 

Delivery  wagons 1,862 

Illinois 447 

Indiana 107 

Michigan 401 

New  York 139 


28 GRAPHIC  vSALES  ANALYSIS 

Class  and  State,  continued  Number 

Ohio 469 

Pennsylvania 242 

Trucks 1,366 

Illinois 28 

Indiana 43 

Michigan 372 

New  York 475 

Ohio 202 

All  other  varieties 1,497 

Connecticut 119 

Indiana 22 

Massachusetts 280 

Michigan 144 

New  York 406 

Ohio 135 

Pennsylvania 127 

PAPER  AND  WOOD  PULP  INDUSTRY 
Material  Tons 

Newspaper 606,342 

Book  paper 293,523 

Cardboard 22,955 

Fine  paper 85,506 

Wrapping  paper 174,104 

Boards 83,591 

Tissues 49,339 

Blotting 5,226 

Building 128,909 

Hanging  papers 37,828 

Total 1,487,323 

Wood  pulp,  purchased 1,241,914 

Ground 452,849 

Soda  fiber 154,626 

Sulphite  fiber 626,029 

Other  chemical  fiber 8,410 

Rags,  including  cotton  and  flax  waste  and  sweeping  357,470 

Old  or  waste  paper 983,882 

Manila  stock,  including  jute  bagging,  rope,  waste, 

threads,  and  so  on 117,080 

Straw 303,137 


PRODUCTION  DATA  AND  FIGURES  29 


TOTAL  NUMBER  OF  MANUFACTURERS  IN  ALL 
LINES  IN  EACH  STATE 

States  Manufacturers 

New  York 19,070 

Pennsylvania 18,639 

Ohio 10,555 

Illinois ; 9,144 

Massachusetts • 7,845 

New  Jersey 5,781 

Indiana 5,661 

Michigan a'qo^ 

Missouri 4,829 

Wisconsin 4,242 

California o'no^ 

Connecticut - o  oi  q 

Minnesota ?'?! 

Iowa 2,466 

Maryland 2,332 

Kentucky 2,080 

Texas 2,061 

Tennessee i  oa7 

Virginia 1,867 

North  Carolina 1,859 

Georgia ]>^^ 

Louisiana ca^ 

Maine J'^^O 

Kansas 1,501 

Rhode  Island 1»428 

Oklahoma 1'411 

Washington 1'271 

Nebraska l'^o7 

New  Hampshire I'inn 

Colorado 1'129 

Arkansas nTc 

Vermont 91o 

West  Virginia 911 

Oregon »48 

South  Carolina °^^ 

Mississippi °f^ 

Alabama Jjjf 

Florida l^l 

South  Dakota Jf? 

North  Dakota ^H 


30 GRAPHIC  SALES  ANALYSIS 

TOTAL  NUMBER  OF  MANUFACTURERS  IN  ALL 
LINES  IN  EACH  STATE,  continued 

States  Manufacturers 

Delaware 492 

District  of  Columbia 292 

Utah 272 

Idaho 244 

Montana 228 

Nevada 61 

New  Mexico 59 

Arizona 55 

Wyoming 37 

Total .139,411 

To  find  the  number  of  people  in  the  country  in  proportion 
to  your  factory — that  is,  the  average  number  of  persons  your 
factory  serves — look  under  the  "per  capita  ratio"  column 
opposite  the  industry  in  which  you  are  engaged.  For 
example,  the  average  boot  and  shoe  factory  serves  72,325 
people.  This  figure,  together  with  the  others  listed  in  the 
following  table,  are  based  on  an  estimated  total  population 
in  the  United  States  of  98,000,000. 


COMPARATIVE  DATA  AND  FIGURES 
FROM  WHOLESALE  LINES 

THOROUGH  knowledge  of  what  it  costs  whole- 
salers to  do  business  cannot  come  in  amiss  for  any 
distributor.  You  will  find  much  of  interest  in 
the  tables  in  the  following  pages,  covering  most  of  the 
hues  of  business  in  which  wholesalers  are  necessary  to 
most  effective  distribution. 

Some  sets  of  figures,  obtained  from  various  sources, 
are  of  general  interest  to  business  men  who  are  on  the 
lookout  for  larger  business  tendencies  and  develop- 
ments. Others  of  the  tables  bring  to  light  facts  per- 
taining more  especially  to  certain  lines  of  business. 
Both  kinds  are  important,  you  will  agree,  to  effective 
planning  for  the  future.  Today,  more  than  ever  before, 
sellers  of  goods  are  looking  ahead.  The  correct  solution 
of  present-day  problems  is  just  as  vital  as  before;  but 
so  great  and  so  far-reaching  are  the  changes  of  to- 
morrow likely  to  be,  that  it  is  an  imperative  task  of 
sales  management  as  far  as  possible  to  gage  and  an- 
ticipate future  business  conditions. 

As  a  fact,  it  is  vital  that  every  wholesaler  know  not 
only  what  his  selling  possibilities  are,  but  what  his 
costs  in  every  detail  ought  to  be.  Progressive  men 
are  looking  into  this  question  of  costs  in  the  light  of 
future  conditions.  But  first,  they  necessarily  have 
their  "house  in  order."  They  know  to  a  certainty 
what  it  is  costing  them  to  get  business  in  their  entire 
selling  field,  what  they  are  pajdng  to  pack,  ship,  and 
distribute  goods  to  cover  present  sales. 


GRAPHIC  SALES  ANALYSIS 


The  international  scope  business  is  reaching  today 
calls  for  an  analysis  of  wholesaling  such  as  has  never 
before  been  attempted.  What  are  your  expenses?  What 
are  they  in  proportion  to  your  sales?  Percentages  of 
this  sort  are  important.  They  point  the  way  to  busi- 
ness success  or  failure.  In  these  pages  are  figures 
and  percentages  of  this  type  for  various  lines  of  trade. 
A  glance  through  the  pages  should  tend  to  crystallize 
for  wholesalers  much  extremely  valuable  cost  and  sell- 
ing information. 

For  instance,  if  you  want  to  know  how  much  con- 
cerns are  paying  for  rent  in  proportion  to  sales,  you'll 
find  the  figures  here.  In  fact,  wherever  business  men 
are  faced  with  present-day  problems  in  selling,  these 
figures  will  help  in  the  solution. 


WHOLESALE  DATA  AND  FIGURES 

Did  you  ever  wonder  how  many  wholesalers  there  are  in 
the  United  States?  These  figures  will  give  you  some  idea  as 
to  the  number  and  show  in  what  lines  they  are  engaged,  too. 
Produce  takes  the  lead  with  7,785.  The  smallest  number  of 
dealers  listed  are  the  sponge  wholesalers,  who  number  but  37. 
In  checking  up  on  these  figures  it  will  be  interesting  as  well 
as  helpful  to  compare  them  with  similar  tabulations  given 
in  the  manufacturing  and  the  retail  sections . 

WHOLESALE  DEALERS  IN  THE  UNITED  STATES 

(From  R.  G.  Dun  and  Company's  list  as  compiled 

by  the  Rapid  Addressing  Machine  Company) 

Line  Number 

Agricultural  implements 240 

Bakers 620 

Boots  and  shoes 522 

Butchers  and  meat  markets 781 

Butter  and  eggs 1,194 

Carpets 83 

Cheese 263 

China,  crockery,  and  glassware 340 

Cigars  and  tobacco 1,991 

Clothing 160 

Coffee,  tea,  and  spices 547 

Drugs 668 

Dry  goods 725 

Electrical  supplies 424 

Fancy  goods  and  notions  (exclusive) 786 

Feed,  flour,  and  grain 1.572 

Fish 950 

Florists 1»765 

Fruit 1.831 

Furniture 307 

Glass,  oils,  and  paint 605 


GRAPHIC  SALES  ANALYSIS 


Line,  continued  Number 

Gloves 63 

Grain 1,210 

Grocers 3,840 

Hardware 928 

Harness  and  saddlery 314 

Hats  and  caps 201 

Honey 113 

Hosiery 1,105 

Jewelers 815 

Junk 189 

Men's  furnishings  (exclusive) 315 

Milliners 424 

Neckwear 315 

Notions  and  toys 802 

Paper 905 

Produce 7,785 

Seed 597 

Sponges 37 

Sporting  goods 423 

Stationery 391 

Tobacco  (leaf) 592 

Wall  paper 284 

Willow  and  woodenware 131 


RECAPITULATION  OF  WHOLESALE  TRADE 


Towns 

1,000 

2,500 

Over 

Total 

below 

to 

to 

1,000 

2,499 

24,999 

25,000 

Wholesale  grocers. .  107 

250 

1,369 

1,261 

2,987 

Wholesale  dry 

goods  

..     1 

14 

136 

526 

677 

Wholesale  hardware     0 

4 

149 

401 

554 

Wholesale  drugs . 

..     6 

16 

189 

432 

643 

Wholesale  jewelry. .     4 

10 

63 

751 

828 

Wholesale  fancy 

goods  and  notions    5 

3 

37 

362 

407 

Wholesale  boots 

and  shoes 

..     0 

4 

76 

501 

581 

Wholesale  toys  .  . 

..     0 

0 

15 

392 

407 

Total 

.   123 

301 

2,034 

4,626 

7,084 

GRAPHIC  SALES  ANALYSIS 


LOCATION  OF  WHOLESALE  TRADE 


T3   « 

«J      £      9  W)-I3         g 


States  o       I     -S     §)      «     >.§ 


5       K     I     Q     Q    ^iE^fSl 


Connecticut 43  11  5  9  10  2  8  4 

Maine 29  8  2  7  8  1  7  8 

Massachusetts 76  30  48  60  22  7  23  87 

New  Hampshire 16  3010000 

Rhode  Island 12  5  13  6  4  3  4  2 

Vermont 8  3  1  1  2  0  0  2 

New  Jersey 49  3  4  9  11  12  7  0 

New  York 196  38  223  112  112  70  77  68 

Ohio 123  27  67  51  37  44  33  23 

Pennsylvania 173  49  77  90  63  52  29  64 

Alabama 89  16  3  17  10  6  4  9 

Delaware 10  2  1  1  1  0  1  1 

Florida 76  6  15  6  6  2  1  1 

Georgia 190  15  5  35  21  4  6  19 

Kentucky 85  9  2  9  15  8  9  5 

District  of  Columbia....   11  2  4  2  4  3  0  2 

Maryland 43  12  21  22  18  25  14  24 

Mississippi 70  7  2  16  9  0  0  5 

North  Carolina 205  10  0  16  24  5  1  12 

South  Carolina 73  5  3  7  9  2  1  0 

Tennessee 93  22  6  25  19  14  19  25 

Virginia 126  30  2  15  14  10  6  24 

Wet  Virginia 64  15  2  12  12  5  3  8 

Illinois 112  14  86  27  29  21  36  33 

Indiana 75  12  13  15  19  9  14  6 

Iowa 44  23  20  0  20  7  7  14 

Michigan 71  16  20  28  16  13  11  10 

Minnesota 37  12  23  0  3  13  6  13 

Nebraska 24  8  22  0  6  2  4  2 

North  Dakota 16  0  0  0  1  0  0  0 

South  Dakota 12  3202000 

Wisconsin 35  9  14  0  17  6  5  31 

Arizona 14  3011010 

Arkansas 88  6  1  10  12  0  0  2 

Colorado 19  3  11  0  9  6  6  2 

Kansas 43  9  6  0  5  2  2  3 


WHOLESALE  DATA  AND  FIGURES 


LOCATION  OF  WHOLESALE  TRADE,  Continued 

oD        «      2     S  Sd"-Z3        9 

States  c3       ^^§3a>»fl         ",« 

2       1      I     b     2     1^    Hi 
6       a      >^    Q     Q    ^g  Hfg-g 

Louisiana 71      8      8     18     11      8      0      9 

Missouri 82     18    43      0     14     10     13     25 

New  Mexico 13      1000040 

Oklahoma 62      8      3      4      2      1      3      2 

Texas 198    30      7    33    20      4     14      8 

California 53    23    26      0      7    23     15     17 

Idaho 63000010 

Montana 11      6      0      1      7      0      1      2 

Nevada 4      1      0      0      0      0      0      0 

Oregon 07414222 

Utah 10      4      2      7      5       1       3      4 

Washington 20      9     11       3      2      4      6      3 

Wyoming 70000000 

Indicated  typical  and  attainable  cost-of-doing-business 
figures  for  wholesalers  are  presented  in  the  following  tables. 
The  total  figures  shown  here  indicate  apparently  that  whole- 
sale hardware  concerns  have  the  highest  cost  of  doing  busi- 
ness and  that  it  costs  wholesale  grocers  less  than  the  other 
lines  studied.  It  was  apparent  early  in  the  nation-wide  in- 
vestigation among  wholesalers  conducted  during  the  prepara- 
ation  of  these  bulletins  that  the  volume  of  sales  had  a  direct 
influence  on  the  cost  of  doing  business.  For  this  reason  the 
concerns  were  classified  according  to  whether  their  sales 
were  $1,000,000  or  more,  or  from  $500,000  to  $1,000,000,  or 
less  than  $500,000.  It  was  also  found  that  sectional  influences 
affected  costs.  Firms  doing  business  in  the  West  and  along 
the  Atlantic  seaboard  were  found  to  have  higher  costs  than 
those  in  the  Middle  West.  The  western  concerns'  costs  were 
from  1.5%  to  2%  higher,  while  many  eastern  concerns 
reported  costs  about  1%  higher  than  the  average  for  the 
Middle  West.  Wholesalers  in  the  South,  it  was  found,  usually 
had  a  somewhat  lower  cost  of  doing  business. 


GRAPHIC  SALES  ANALYSIS 


COSTS  OF  DOING  BUSINESS  FOR  WHOLESALERS 

(Annual  sales  more  than  $1,000,000) 

Indicated  Indicated 

typical  attainable 

Line                                                   costs  costs 

Groceries 10.3%  8.8% 

Clothing 17.8%  15.6% 

Hardware 23.5%  18.8% 

Electrical  goods 18. 1%  15.7% 

Shoes 15.8%  11.9% 

Drugs 14.6%  12.4% 

Dry  goods 12.8%  10.6% 

(Annual  sales  $500,000  to  $1,000,000) 

Indicated  Indicated 

typical  attainable 

Line                                                   costs  costs 

Groceries 9.0%  7.5% 

Clothing 16.1%  12.8% 

Hardware 19.2%  16.7% 

Electrical  goods 18.1%  15.7% 

Dry  goods 12.8%  10.6% 


(Annual  sales  less  than  $500,000) 

Indicated  Indicated 

typical  attainable 

Line                                                   costs  costs 

Groceries 7.2%  6.3% 

Hardware 17.8%  14.9% 

Electrical  goods 17.0%  13.3% 


Figure  13:  Indicated  typical  total  cost  percentages  from  seven  whole- 
sale lines  for  various  size  concerns  are  shown  here  in  graphic  form.  The 
grocery,  hardware,  and  clothing  columns  indicate,  as  you  will  note, 
how  costs  of  doing  business  increase  as  a  business  increases  in  size. 


Figure  14:  These  columns  are  the  indicated  attainable  total  cost 
percentages  in  seven  wholesale  lines,  also  given  in  graphic  form.  Com- 
parison of  this  chart  with  that  shown  in  Figure  13,  brings  out  clearly 
what  reduction  of  expense  reasonably  may  be  expected  in  these  lines. 


Figure  15:  This  graph  represents  cost-of  doing-business  figures  aver- 
aged from  the  books  of  scores  of  wholesale  concerns  located  mainly  in 
the  Middle  West.    Excessively  low  and  high  figures  were  not  considered. 


Figure  16:  The  concern  whose  cost-of-doing-business  figures  are 
charted  here  is  one  of  the  oldest  in  the  country.  Its  costs  offer  a 
striking  example  of  the  steady  rise  in  the  operating  costs  of  a  business. 


INSERT  III 


^ 


I.        DEC. 


Insert  I 
determi 
— eithei 
ful.     Y. 


Jrogress 

e  falling 

Simple 

aluable. 


/i/[^r~~~--~-J/olume  of  Retail  Trade 

in  the  United  States 

i   (/lV^S^37// 

MOKJT- 

jC 

^rX 

/iv--^^^ 

i\ 

/~~^DAK.\ 

'l^^^^y-'^^ 

/""^^ON      /        \ 

C"^^ — ^ 

l-\-.-\ 

MIN(N.  /'    ^^-v 

'p:&-^~-\. 

Jlfl' 

^^f 

i 

■                )                 ' 

;    s.  (dak. 

\l8^                 } 

\       IOWA      )         2 
\        62/86 

So  22  fL-^ 

NEBR,   34 

Y^L.x     1  '^^" ;  CO.??. 

)- 

t Y    ,, 

^"-nV>^8  97 

i      MO.  51 

\10          ( 

— ■— s 

;           KAN 

/Sr^6     \ 

TE?,i|N,   J^ 

'"n  .  CAR    ^ 

I  ~/~ 

— 1 Ju 

\         /     -^R'2. 

i      NJMEX. 

\     !              i^" 

—d^ 

S.CABy^ 

1  ARK  y" 

'"'  '  '\  „^ 

^^\_^ 

1     / 
-J-J     \ 

i     33     \'2 

1    ALft.\     GA 
\ 

88y 

60      46 

ff- M15S 

TEXAS 

\  X  / 

A 

\ 

lf5|^^^>-^i:^^»""\ 

\         47    54 

\\ 

VOLUME  OF 

VOLUME  OF 

VOLUME  OF 

w 

VOLUME  OF 

CITY                   RETAIL  TRADE 

CITY 

RETAIL  TRADE 

CITY 

RETAIL  TRADE 

CITY 

RETAIL  TRADE 

1  New  York  Cily           1.150,333.790 

26  Louisville,  Ky. 

47,762.000 

51   Nashville,  Tenn. 

23.411,400 

76  Manchesler,  N,  Y. 

15,656,600 

2  Chicago,  III.                   500 

000 

27  Jersey  City,  N.  J. 

45 

951.750 

52  Lowell.  Mass. 

22,649,000 

77  Elizabeth,  N,  J. 

15,604 

3  Philadelphia,  Pa.           342 

2S  Columbus,  Ohio 

975,600 

63  Tacoma,  Wash. 

22,540,000 

78  Troy,  W.  Y. 

15,583 

4  Boslon,  Mass.               177 

811 

050 

29  Rochester,  N.  Y 

283.400 

54  Houston,  Tex. 

79  W.lkes-Barro,  Pa. 

15,351 

208 

5  St.  Louis,  Mo.               151 

30  Oaklard,  Calif. 

3! 

720,800 

55  Trenton.  N.  J 

22,318:600 

80  Jacksonville,  Fla. 

800 

6  Cleveland,  Ohio            134 

814 

600 

31  Toledo,  Ohio 

310,800 

56  Hartford,  Conn. 

22,180,000 

81  Fort  Wayne,  Ind. 

15:331 

600 

7  Ballimore,  Md.              117 

200 

32  Atlanta,  Ga. 

3! 

111,600 

57  Reading,  Pa. 

21,976,200 

82  Evansville,  Ind. 

15.215 

600 

8  Pittsburah,  Pa.               115 

818 

36 

58  Youngslown,  Ohio 

21,677,000 

83  Erie.  Pa. 

9  Detroit,  Mich.               114 

JOO 

34  Omaha,  Neb. 

59  Sprmghcld,  Mass. 

84  E.  St.  Louis,  III. 

14:94' 

600 

10  Los  Angeles,  Calif.        100 

35  Richmond,  Va. 

31 

337^400 

60  Ft.  Worth,  Texas 

20312:400 

85  Haaisburg,  Pa. 

14,40: 

000 

II  Buffalo,  N.  Y.                 93 

600 

124,800 

61  Albany,  N.  Y 

20,839,800 

86  Peoria,  111. 

12  San  Francisco,  CaliT.      92 

703 

37  Spokane,' Washington     30 

62  Dos  Moines,  la. 

87  South  Bend,  Ind. 

13:78! 

200 

13  Milwaukee,  Wis.             87 

307 

38  Worcester,  Mass 

32 

562^800 

63  Lawrence,  Mass. 

20,'l  12^000 

88  Savannah,  Ga. 

13.761 

000 

14  C.nc.nnal.,  Oh.o             82 

200 

39  New  Haven,  Conn, 

64  Schenectady,  N.  Y. 

19,903,800 

89  Johnstown,  Pa. 

800 

15  Newark,  N.  J,                 81 

40  Memphis,  Tenn. 

2< 

799;00O 

65  Kansas  C.ty.  Kan. 

19,887,400 

11216 

600 

16  New  Orlearis,  La,             74 

349 

400 

41  Scranlon,  Pa. 

66  Camden,  N.  J. 

19,121,940 

91   Holyoke,  Mass. 

13,216 

17  Washington,  D,  C            72 

42  Fall  River,  Mass. 

67  Duluth,  Minn, 

18,899,000 

92  Brockton,  Mass. 

810 

18  Minneapolis,  Minn.         72 

690 

eoo 

43  Grand  Rapids,  Mic 

-      25 

658!20O 

68  Wilmington,  Del. 

18,853,000 

93  F^artland,  Me. 

12:773 

400 

19  Seattle,  Washington        69 

800 

44  Dayton,  Ohio 

444,800 

69  Oklahoma,  Okla. 

18,588,600 

94  Charleston,  S.  C. 

12,146 

20  Kansas  C.ty,  Mo              59 

45  Peterson,  N.  J. 

24 

919,740 

70  Yonkcrs,  N.  Y 

17,970,840 

95  Possaic.  N,  J. 

11,483 

21   Porlland.  Ore.                   59 

600 

46  Dallas,  Texas 

24 

905,400 

71  Norfolk,  Va. 

96  Bayonne,  N-  J. 

11,182 

i80 

22  Indianapolis.  Ind             54 

47  San  Antonio,  Texas 

72  Waterbury,  Conn. 

17:394:600 

97  Hoboken,  N,  J. 

23  Denver,  Colorado            52 

160 

000 

48  Bridgeport,  Conn 

2< 

3151800 

73  Ut(ca,  N.  Y. 

98  Somerv.llo,  Mass. 

120 

24  Providence,  R-  1.              50 

ooo 

49  New  Bedlord,  Pa. 

74  Akron.  Ohio 



25  St.  Paul,  M.nn.                 49  446 

to6 

479.800 

75  Lynn,  Mass. 

10:392:320 

Insert  III:  As  dealer  sales  are  an  exceedingly  important  factor  in 
determining  distribution  and  selling  policies  for  so  many  distributors 
— either  manufacturers  or  wholesalers— this  map  will  be  found  help- 
ful.    You  will  find  the  cities  classified  according  to  volume  of  retail 


trade,  as  explained  fully  in  the  key  given  below  the  map.  Perhaps 
comparison  of  your  own  sales  volume  with  the  total  volume  of  retail 
trade  for  these  98  cities  will  help  you  to  locate  the  districts  where  addi- 
tional advertising  or  selling  effort  could  be  most  profitably  expended. 


Figure  19:  This  graph  is  used  by  one  concern  to  watch  the  progress 
of  successful  letters  to  prospects  and  to  check  on  those  which  are  falling 
down.  The  total  returns  from  each  letter  appear  by  months.  Simple 
plans  like  this  for  locating  result-producing  methods  are  highly  valuable. 


1805    1906    1907 

14 

Seven  Ye: 

Rising  Ci 

^ 

/^ 

y^ 

^^ 

Figure  15:  This  graph  i 
aged  from  the  books  of  sc 
the  Middle  West.    Excess: 


" 

1880   1885   1890 

10 

How  the  ( 

Ha! 

W 

^ 

«• 

^""^ 

^ 

Figure  16:  The  concei 
charted  here  is  one  of  tl 
striking  example  of  the  st 


JAN.  FEB.         MAR.         APR.         MAY  JUNE         JULY         AUG.         SEPT.         OCT.  NOV.        DEC. 


Figure  19:  This  graph  is  used  by  one  concern  to  watch  the  progress 
of  successful  letters  to  prospects  and  to  check  on  those  which  are  falling 
down.  The  total  returns  from  each  letter  appear  by  months.  Simple 
plans  like  this  for  locating  result-producing  methods  are  highly  valuable. 


GRAPHIC  SALES  ANALYSIS 


AVERAGE  COSTS  OF  DOING 
SOUTHERN  WHOLESALE 


Average  for Ala.       Ark.       Fla.         Ga.         La. 

Selling    Expense  .0266  .0195  .0246 

Salaries,  sales  force   .0160  .0088  .0142 

Commissions 

Sales  traveling  ex- 
pense  0101  .0099  .0115 

Advertising,  in- 
cluding catalog . .    .0011  .0100  .0024 

Shipping  and 
Warehouse 0105     .0100     .0113 

Wages — receiving, 
shipping,  stock 0108     .0010 

Drayage  and  Ex- 
press  0002     .0010 

Management  and 
Office 0132     .0174     .0174 

Manufacturing  and 
office  salaries 0183     .0118 

Printing  and  sta- 
tionery  0040     .0014 

Office  supplies 0001     

Postage 0016     .0018 

Credit  and  collec- 
tion  0005     .0015 

Fixed   Charges — 

Upkeep 0062     .  0054     .  0075 

Rent,  including 

warehouse 0003     .  0032 

Heat,  light,  and 

power 0005     .  0003 

Insurance,     credit, 

casualty 0023     .0013 

Taxes,     mercantile 

and  corporation 0044     ,0015 


.0234 

.0165 

.0266 

.0116 

.0080 

.0045 

.0005 

.0004 

.0088 

.0124 

.0098 

.0102 

.0013 

.0022 

.0180 

.0202 

.0152 

.0171 

.0036 

.0027 

.0018 



.0002 

.0004 

.0091 

.0186 

.0037 

.0016 

.0004 

.0016 

.0013 

.0037 

.0026 

INSERT  IV 


Greneral 

average 

of  each 

item 

.0247 
.0146 
.0030 

.00813 

.00216 

.01028 
.00766 
.00167 

.01658 
.01310 

.004018 

.00121 

.00166 

.0093 

.0086 

.00706 

.0007 

.001617 

.00415 


Insert  IV :     In  this  map  of  the  United  States  are  shown  the  dividing  lines  to  meet  the  individual  selling  needs  of  the  distributor — whether  whole-  Atlanta.     Just  which  counties  are  included  in  each  district  is  explained  pared  for  the  Bureau  of  Business  Standards,  and  can  be  used  profitabl.v 

between  the  nine  important  sales  districts  of  the  country,  as  indicated  saler  or  manufacturer.     County  lines,  rather  than  state  lines,  are  fol-  fully  in  the  key  given  below  the  map,  as  you  will  note.     Note  also  the  by  every  distributor  who  is  interested  in  national  or  regional  sales.     Its 

by  careful  investigatioru    A  different  type  of  shading  has  been  used  for  lowed,  and  were  determined  after  a  careful  examination  into  economical  information  given  concerning  population,  land  area,  and  population  per  chief  advantage  consists  in  malcing  it  possible  to  route  salesmen  more 

eachsertion.    These  districts  may  be  combined  or  subdivided,  of  course,  railway  travel.    In  this  particular  instance,  the  home  office  is  located  in  square  mile  for  each  of  the  nine  districts.    This  map  was  specially  pre-  economically    and    applying    concentration  where  it  is  most  needed. 


WHOLESALE  DATA  AND  FIGURES 

BUSINESS— FROM  MEMBERS  OF  THE 
GROCERS'  ASSOCIATION 


General 

N.C. 

s.  c. 

Okla. 

Tenn. 

Texas 

Va. 

average 

of  each 

item 

.02125 
.0150 

.0438 
.0077 

.02359 

.0155 

.0010 

.0261 
.0148 
.0050 

.02652 
.0160 

.02 
.0150 

.0247 
.0146 
.0030 

.0050 

.01005 

.0108 

.00652 

.0050 

.00813 

.0018 

.0010 

.0005 

.0019 

.00216 

.0081  .0062  .00737  .01005  .0157  .0137  .01028 
.0062  .0062  .0073  .0038  .00853  .0225  .00766 
.0025 


0146 

.0078 

.01394 

.0228 

.  \J\JOKJ\J 

.0221 

.0164 

.01658 

0112 

.0078 

.01026 

.0215 

.01787 

.01310 

0012 
0012 
0025 

.0008 
.0003 
.000846 

^0020 

.00311 

.0010 

.00149 

.004018 

.00121 

.00166 

0020 

.000145 

.0020 

.00075 

.0093 

0150 

.0160 

.0097 

.0054 

.0093 

.0025 

.0086 

0050 

.0120 

.0026 

.00243 

.00706 

0012 

.0003 



.0006 

.0007 

0012 

.0012 

.00225 

.00179 

.001617 

.0062 

.0068 

.0044 

.00364 

.00415 

G 


Average  for ... 

Selling    Expe 
Salaries,  sales  fc 
Commissions.  . 
Sales  traveling 

pense 

Advertising, 

eluding  catalc 

Shipping  and 
Warehouse. 

Wages — receiv 
shipping,  stoc 

Drayage  and 
press 

Management 

Office 

Manufacturing 

office  salaries 
Printing    and 

tionery 

Office  supplies . 

Postage 

Credit  and  co 

tion 

Fixed   Chargi 

Upkeep 

Rent,  includ 

warehouse . . . 
Heat,  light,  . 

power 

Insurance,     cr( 

casualty 

Taxes,     mercai 

and  corporat 


WHOLESALE  DATA  AND  FIGURES 

BUSINESS— FROM  IMEMBERS  OF  THE 
GROCERS'  ASSOCIATION 


General 

N.C. 

s.c. 

Okla. 

Tenn. 

Texas 

Va. 

average 

of  each 

item 

.02125 
.0150 

.0438 
.0077 

.02359 

.0155 

.0010 

.0261 
.0148 
.0050 

.02652 
.0160 

.02 
.0150 

.0247 
.0146 
.0030 

.0050 

.01005 

.0108 

.00652 

.0050 

.00813 

.0018 

.0010 

.0005 

.0019 

.00216 

.0081  .0062  .00737  .01005  .0157  .0137  .01028 
.0062  .0062  .0073  .0038  .00853  .0225  .00766 
.0025 


0146 

.0078 

.01394 

.0228 

.  \JKJOKJVJ 

.0221 

.0164 

.01658 

0112 

.0078 

.01026 

.0215 

.01787 

.01310 

0012 
0012 
0025 

.0008 
.0003 
.000846 

^0020 

.00311 

.0010 

.00149 

.004018 

.00121 

.00166 

0020 

.000145 

.0020 

.00075 

.0093 

0150 

.0160 

.0097 

.0054 

.0093 

.0025 

.0086 

0050 

.0120 

.0026 

.00243 

.00706 

0012 

.0003 

.0006 

.0007 

0012 

.0012 

.00225 

.00179 

.001617 

.0062 

.0068 

.0044 

.00364 

.00415 

GRAPHIC  SALES  ANALYSIS 


AVERAGE  COSTS  OF  DOING 
SOUTHERN  WHOLESALE  GRO- 


Average  for Ala. 

Repairs  and  depre- 
ciation   


Miscellaneous 

Expense 005 

Telephone  and  tele- 
graph   

Association  dues 

Charity  and  unjust 
claims 

Damage  and  break- 
age  

Expressage  on  re- 
turned goods 

Losses  and  Bad 
Debts 0056 

Interest  on  Cap- 
ital 6% 0090 

Interest  on  Bor- 
rowed Capital 
6% 00L5 

Total  Cost  Aver- 
age  0689 


Ark.        Fla. 
.0003     


Ga. 


.0001 


La. 


,0143 


.0027     .0030       .0033       .0024 


.0005     .0004 
0007 


.0009 


.0048  .0095 

.0070  .0075 

.0069  .0040 

.0619  .07695 


.00052 
.00034 

.00044 

.0002 

.00001 

.0108 

.0099 

.0082 
.08715 


.0012 
.0002 

.0010 


.0017 
.0132 

.0040 
.0920 


WHOLESALE  DATA  AND  FIGURES 

BUSINESS— FROM  MEMBERS  OF  THE 

CERS'  ASSOCIATION,  Continued 

General 
average 
of  each 
N.  C.   S.C.   Okla.   Teirn.  Texas   Va.    item 

.0012   .001   .0022    00130  0028 

.0081   .0120  .00288   .00217  .00115  .0052  .00428 


.00385  .., 
.0003   ... 

, ..  .00125   ... 

...  .00177  ... 
...  .0004   ... 

..  .00135 
..  .00018 

.0003   ... 



...  .00102  ... 

..  .00073 

.0003   ... 

...  .00625   ... 

...  .0001   ... 

. .  .00171 
..  .00001 

.0025  00665  .00645  .00903  .0050  .00649 

.0078  0108  .0070  .0146  .0025  .0088 

.0075  0046  .0010  .00698  .0037  .0043 

,06695  .0507  .07909  .07445  .09272  .0700   .07462 


THE  AVERAGE  LIFE  OF  CONCERNS 


MANUFACTURING 


Furniture. 


Flour  and  grist  mills ^10.7 

Iron  works 8.6 

Printing 6.7 

Lumber  and  timber 7.0 

Boots  and  shoes 7.5 

Cigars  and  tobacco 7.5 

Average  for  these  14  leading  lines 
Average  for  213  other  lines. 


.6.5  years  Hosiery  and  knit  goods 10.0  year* 

Creamery  goods 5.0  " 

Brass,  bronze,  and  copper_5.4  " 

Clothing 9.2  " 

Drugs 5.3  " 

Automobiles 5.0  " 

Carriages  and  wagons 7.0  ". 


General  average  for  manufacturing  concerns. 


.7.2  years 
7.0      " 
.7.0      " 


WHOLESALE 


Bakery  goods 

Boots  and  shoes. 
Butter  and  eggs- 

Cigars  and  tobacco 6.5 

Clothing ___6.6 

Confectionery 9.2 

Dry-goods 7.5 

Flour  and  feed 7.6 


_6.6  years 
.10.0    " 
_5.3     " 


Fruits 

Groceries- 
Hardware. 

Lumber 

Meats 


Paints,  oils  and  glass- 

Paper 

Produce 


_  6.2  years 

.10.9  " 

_  8.5  " 

_  7.4  •• 

.  6.5  " 

-6.1  - 

_8.5  " 

_7.5  '• 


General  average  for  wholesale  concerns. 


.7.5  years 


RETAIL 


Groceries. 
Hardware. 


.  7.1  years 
.7.9    " 


Paints  and  wall  paper_6.7 

Drugs 7.8 

Books  and  stationery 6.9 


Jewelry — 
Dry-goods - 
Clothing  — 


Boots  and  shoes - 
Furniture 


.  7.2  years 
.6.9     '• 
.6.4     " 
.7.4     " 
.6.8     " 


General  average  for  retail  concerns. 


.7.1  years 


Figure  26:  This  chart  provides  a  summary  of  the  average  length  of 
life  of  the  manufacturing,  wholesale,  and  retail  concerns  that  continued 
in  business  less  than  30  years.  It  is  interesting  to  compare  the  length  of 
the  "lives"  of  concerns  selling  the  same  line  in  these  classes  of  business. 


GRAPHIC  SALES  ANALYSIS 


DEATH  RATES  BY  FIVE-YEAR  "GENERATIONS" 

FOR  16  WHOLESALE  LINES 

Percentage  of  total  concerns  in  business  which  died  within 

each  five-year  period 

Line  1891        1896        1901        1906        1911 

Bakery  goods 100%        60%        25% 

Boots  and  shoes 60%        

Butter  and  eggs 100%       22%       80%        66% 

Cigars  and  tobacco..  50%      100%       60%       60%       50% 

Clothing 50%        ....        33% 

Confectionery 33%        60%        

Dry  goods 50%      100%        

Flour  and  feed 58%       66%       25%        

Fruits 60%       75%       55%        50%        62% 

Groceries 16%       66%      100%       50%        50% 

Hardware 50%        ....        25%        ....      100% 

Lumber 40%       55%        42%        50% 

Meats 66%        ....      100%       66% 

Paints,  oils,  and 

glass 100%       33%        ....        62%      100% 

Paper 33%        75% 

Produce 80%       80% 

DEATH  RATE  FOR  28  WHOLESALE  LINES 
This  table  shows  the  death  rate  by  generations  in  the  16 
lines  of  wholesale   concerns  that  were  investigated  by  the 
Bureau  of  Business  Standards. 

(The  rate  is  given  as  the  percentage  of  failures  to  the  total 
concerns  in  business  during  a  period  of  30  years) 

Line  Rate 

1.  Bakery  goods 30.0% 

2.  Books  and  stationery 70.0% 

3.  Boots  and  shoes 50.0% 

4.  Butter  and  eggs 70.7% 

5.  Carpets  and   oilcloths 50.0% 

6.  Cigars  and  tobacco 79 . 1% 

7.  Clothing 37.5% 

8.  Confectionery 41 . 1% 

9.  Crockery 50.0% 

10.  Drugs 42.8% 

11.  Dry  goods 33.3% 


Wholesalers 

Lines 

18S8-18M 

1885 

1900 

^1905 

1910 

1815 

Bakery  Goods  and  Confectionery 

CofTVany  No,  I 

Confectionery  and  Fruite 

dynpany  No.  1 
Company  No.  2 

. 

Ciuart 

Company  No.  1 
Company  No.  2 

_ 

__Sisniries  Dealers  in  Business 
between  1886  and  1890 

_  «  Siflnifies  Dealers  in  Business 
between  1895  and  1900 

- 

Ck)al 

Company  No.  1 

—  _— — 

Commission  Goods 

Company  No.  1 
Company  No,  2 
Company  Na  3 

1 

. 

Creamery  Supplies 

Company  Na  1 
Company  No.  2 

- 

Dry  Goods 

Company  No.  1 

DruflS 

Company  No.  1 

Fruit* 

Company  No.  1 

•  »^   .. 

_ 

Groceries 

Company  No.  t 
Company  Na  2 

General  Merchandise 

Company  Na  t 

Hardware 

Company  No.  1 

Notions 

Company  Na  1 

^^ 

J 

Figure  28:  Seven  wholesale  or  jobbing  houses  were  in  business  in  one 
town  in  1886.  Only  two  existed  in  1915,  and  one  of  these,  although  it  is 
still  in  business,  is  now  a  retail  store  instead  of  a  wholesale  concern. 


The  Superior  Buying  Chart 

For  Spring  and  Summer  Season 

PaDrIc: 

Cotton  Numben 

,J^^ 

Cm  toe 

Walfthl: 

11 

W«44bl 

Summer  Welabi 

|i 

wx;. 

Lot  Number 
and  Prtce: 

i: 

1  = 

tl 

2I 

S* 

fl 

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I: 

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il 

s: 

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0  Second  Beat 
A  ThWBeat 
A  Fourth  Beat 

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Figure  29:  Investigation  indicates  that  the  chief  cause  of  retail  dry 
goods  failures  is  overbuying.  One  concern  uses  this  chart,  showing 
which  of  ita  lines  are  selling  best,  as  a  guide  to  buying  for  retailers. 


GRAPHIC  SALES  ANALYSIS 


DEATH  RATE  FOR  28  WHOLESALE  LINES,  Continued 

Line  Rate 

12.  Flour  and  feed 55.5% 

13.  Fruits 69.2% 

14.  Furniture 46 . 6% 

15.  Groceries 68.7% 

16.  Hardware 70. 0% 

17.  Haj^  and  straw 70.0% 

18.  Lumber 58.4% 

19.  Meats 71 .4% 

20.  Men's  furnishings 16.6% 

21.  Millinery 50.0% 

22.  Optical  goods 25.0% 

23.  Oysters,  fish,  and  game 75.0% 

24.  Paints,  oils,  and  glass 68.4% 

25.  Paper 50.0% 

26.  Produce 58.3% 

27.  Tea,  cofifee,  and  spices 50.0% 

28.  Wall  paper ". 25.0% 

Death  rate  for  492  wholesale  concerns  in  28  lines  51 . 0% 


WHAT  CHANCE  OF  LIFE  HAS  A 
WHOLESALE  CONCERN? 

Chances  in  10  to  live 

Line  10  Years  15  Years: 

Bakery  goods 6.2  3.7 

Boots  and  shoes 7.1  5.5 

Butter  and  eggs 1.6  0.8 

Cigars  and  tobacco 3.5  2.5 

Clothing 6.6  6.6 

Confectionery 6.3  5.4 

Dry  goods 7.5  5.0 

Flour  and  feed 4.7  3.1 

Fruits 3.9  2.1 

Groceries 5.8  5.0 

Hardware 7.5  3.7 

Lumber 5.3  3.2 

Meats 3.3  1.6 

Paints,  oils,  and  glass 4.0  3.3 

Paper 8.8  7.7 

Produce 5.7  4.3 


TOURING  the  Great  War  business  men  all  over 
the  country  came  to  know  the  building  at 
Washington  which  housed  the  War  Industries 
Board.  There  men  met  to  learn  the  Govern- 
ment's needs  and  to  lay  plans  for  gearing  their 
particular  enterprises  to  the  nation's  enterprise. 
Thus  the  building  may  be  said  to  symbolize  the 
cooperation  and  the  interchange  of  economic 
thought  always  essential  to  the  greatest  progress. 

The  new  structure  in  which  the  Shaw  Pubhca- 
tions  are  now  housed  is  a  permanent  counterpart 
in  stone  of  the  building  that  business  men  knew 
so  well  during  the  war. 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 


AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED  FOR  FAILURE  TO  RETURN 
THIS  BOOK  ON  THE  DATE  DUE.  THE  PENALTY 
WILL  INCREASE  TO  50  CENTS  ON  THE  FOURTH 
DAY  AND  TO  $1.00  ON  THE  SEVENTH  DAY 
OVERDUE. 


'^Hi  '  ^^  1955  11^ 

APR     4    1984 

APR  Q     iQ^i 

K..^ft  28  m^ 

jTlsV* 

APR   15  1* 

atf 

OCT    11 

^3e 

APR  9    1947 

Oc*1^'^^'-  tT 

\70c"    ■'■■•^ 

fiB-r-^^^^ 

LD  21-100nc7,'33 

YD  0i07« 


UNIVERSITY  OF  CAUFORNIA  LIBRARY 


